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SECURITIES AND EXCHANGE COMMISSION
Indiana | 7900 | 43-1664986 | ||
Indiana | 7900 | 35-2100872 | ||
Indiana | 7900 | 20-3879309 | ||
(State or Other Jurisdiction of Incorporation or Organization) | (Primary Standard Industrial Classification Code Numbers) | (I.R.S. Employer Identification Numbers) |
Las Vegas, Nevada 89101
(702) 388-2400
(Address, including zip code, and telephone number,
including area code, of Co-Registrants’
principal executive offices)
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Primary | ||||||||||||
State or Other | Standard | IRS | ||||||||||
Jurisdiction of | Industrial | Employer | ||||||||||
Incorporation or | Classification | Identification | ||||||||||
Name of Registrant | Organization | Code Number | Number | |||||||||
Barden Colorado Gaming, LLC | Colorado | 7900 | 91-2118674 | |||||||||
Barden Mississippi Gaming, LLC | Mississippi | 7900 | 62-1868783 | |||||||||
Buffington Harbor Parking Associates, LLC | Delaware | 7900 | 35-2118254 | |||||||||
Buffington Harbor Riverboats, LLC | Delaware | 7900 | 35-1965780 | |||||||||
The Majestic Star Casino II, Inc. | Delaware | 7900 | 20-3910927 |
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The information in this proxy statement/prospectus is not complete and may be changed. We may not sell the securities offered by this proxy statement/prospectus until the registration statement filed with the Securities and Exchange Commission is effective. This proxy statement/prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities in any jurisdiction where an offer or solicitation is not permitted. |
The Majestic Star Casino, LLC
The Majestic Star Casino Capital Corp.
91/2% Senior Secured Notes Due 2010,
which have been registered under the Securities Act of 1933,
for any and all outstanding
91/2% Senior Secured Notes Due 2010
The Majestic Star Casino, LLC
Majestic Star Casino Capital Corp. II
93/4% Senior Notes Due 2011,
which have been registered under the Securities Act of 1933,
for any and all outstanding
93/4% Senior Secured Notes Due 2011
• | Our offers to exchange the unregistered notes expires at 5:00 p.m. New York City time, on , 2006, unless we extend the exchange offers. |
• | You should carefully review the procedures for tendering the unregistered notes beginning on page 13 of this prospectus. If you do not follow these procedures, we may not exchange your unregistered notes for registered notes. |
• | If you fail to tender your unregistered notes, you will continue to hold unregistered notes and your ability to transfer them could be adversely affected. |
• | No public market currently exists for the unregistered notes. We do not intend to list the registered notes on any securities exchange and, therefore, no active public market is anticipated. |
• | You may withdraw tenders of unregistered notes at any time before the exchange offers expire. |
• | The exchange of registered notes for unregistered notes will not be a taxable exchange for U.S. federal income tax purposes. |
• | We will not receive any proceeds from the exchange offers. |
• | We are not asking you for a proxy and you are requested not to send us a proxy. |
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Consents of Ernst & Young LLP |
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• | our significant indebtedness could adversely affect our financial results and prevent us from fulfilling our obligations on our indebtedness; | |
• | we may not be able to generate sufficient cash flow to service our debt; | |
• | we may not realize any of the anticipated benefits of the Trump Indiana, Inc. (“Trump Indiana”) acquisition; | |
• | we face significant competition in each market where we operate; | |
• | Majestic Star II’s customer base could be negatively impacted by its loss of affiliation with other Trump casinos; | |
• | we may be unable to fund capital improvements; | |
• | our operations are highly taxed and may be subject to higher taxes in the future and we have ongoing tax disputes; | |
• | adverse determinations of issues related to disputed taxes, particularly in Indiana; | |
• | we have assumed the liabilities of Trump Indiana in our stock purchase; further, indemnification obligations of the prior owner of Trump Indiana may not be sufficiently secured; | |
• | employee reductions and union issues could result in work stoppages at Majestic Star, Majestic Star II or Buffington Harbor, which could seriously impact the profitability of our business; | |
• | the indentures governing the notes as well as Majestic’s senior secured credit facility contain covenants that significantly restrict our operations; and | |
• | the additional factors discussed under the section of this prospectus entitled “Risk Factors.” |
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Buffington | ||||||||||
Harbor | ||||||||||
Gaming | Fitzgeralds | Fitzgeralds | ||||||||
Majestic Star | Majestic Star II | Complex | Tunica | Black Hawk | ||||||
Date Opened | June 1996 | June 1996 | June 1996 | June 1994 | May 1995 | |||||
Gaming Square Feet | 40,800 | 43,000 | n/a | 38,088 | 10,253 | |||||
Slot Machines | 1,295 | 1,330 | n/a | 1,307 | 599 | |||||
Table Games | 49 | 10 | n/a | 34 | 6 | |||||
Poker Tables | — | 21 | n/a | — | — | |||||
Hotel Rooms(1) | — | 300 | n/a | 435 standard | — | |||||
72 suites | ||||||||||
Amenities | 3 bars | Steak house | Buffet | Steak house | Restaurant | |||||
VIP lounge | Deli | Food Court | Coffee shop | Bar | ||||||
Coffee shop | Restaurant | Buffet | ||||||||
Bar | Gift shop | 2 bars | ||||||||
Ballroom | Ballroom | |||||||||
Gift shop | ||||||||||
Parking | 2,000 covered | 411 covered | 392 covered valet | |||||||
(includes | 1,213 surface | |||||||||
300 valet) | 171 valet | |||||||||
2,600 surface |
(1) | Of the 300 rooms at Majestic Star II, 28 are currently being used as casino offices. |
• | Majestic Star is a riverboat casino located at the Buffington Harbor gaming complex in Gary, Indiana, approximately 23 miles southeast of downtown Chicago. The riverboat casino is a four-story, 360-foot long vessel with a contemporary design that accommodates approximately 3,000 passengers plus crew. The casino includes approximately 40,800 square feet of gaming space across three expansive decks. The casino vessel provides live entertainment, a sports bar, a VIP lounge, and a private high-limit table games area. Majestic Star is located adjacent to the 2,000-space covered parking garage (300 spaces of which are valet) at the Buffington Harbor gaming complex. | |
• | Majestic Star II (formerly Trump Indiana) also operates from the Buffington Harbor gaming complex. The riverboat casino is a four-story, 280-foot long vessel, which accommodates approximately 2,740 passengers plus crew. The casino vessel includes approximately 43,000 square feet of gaming space that provides live entertainment, a high limit gaming area, and a poker room, which is the largest in the Chicagoland market. Majestic Star II owns and operates a 300-room hotel and various restaurants. It is also located adjacent to the 2,000-space covered parking garage at the Buffington Harbor gaming complex. | |
• | The Buffington Harbor gaming complex is a two-level, 85,410 square foot structure, containing two restaurants and three additional food and beverage outlets. At this time, Buffington Harbor leases the rights to operate these restaurants to third parties and does not operate any of the food and beverage facilities located on its premises. The Buffington Harbor gaming complex is adjacent to an outdoor festival area. The Buffington Harbor gaming complex also contains a gift shop, banquet and entertainment facilities, a VIP |
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• | Fitzgeralds Tunica is located in north Tunica County, Mississippi, approximately 30 miles from downtown Memphis, Tennessee. Fitzgeralds Tunica has an Irish castle theme and is the focal point of a50-acre site adjacent to the Mississippi River. Fitzgeralds Tunica is a full-service entertainment destination whose customer base has increased and become more diversified by its ability to attract, in addition to local customers, independent travelers,tour-and-travel customers and guests for special events and conventions. Fitzgeralds Tunica includes 38,088 square feet of gaming space, a 507-room hotel (including 72 suites), an indoor special events center, an indoor swimming pool, two bars, three restaurants and a gift shop. | |
• | Fitzgeralds Black Hawk is located adjacent to the entrance to the downtown gaming area of Black Hawk, Colorado. Fitzgeralds Black Hawk is approximately 30 miles from Denver. The 10,253 square foot casino also offers a restaurant and a bar. Fitzgeralds Black Hawk also has a 392-space, all valet parking garage adjacent to the casino. |
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Securities To Be Exchanged | On December 21, 2005, we issued $40.0 million in aggregate principal amount of unregistered senior secured notes and $200.0 million in aggregate principal amount of unregistered senior notes in transactions exempt from the registration requirements of the Securities Act. In connection with the initial sale of the unregistered notes, we entered into registration rights agreements in which we agreed, among other things, to deliver this prospectus to you and to complete exchange offers. The terms of the registered notes are substantially identical in all material respects to the terms of the unregistered notes, except for the elimination of some transfer restrictions, registration rights and liquidated damages provisions relating to the unregistered notes. See “Description of the Registered Senior Secured Notes” and “Description of the Registered Senior Notes.” | |
The Exchange Offers | We are offering to exchange $1,000 principal amount of our registered senior secured notes for each $1,000 principal amount of unregistered senior secured notes. We are also offering to exchange $1,000 principal amount of our registered senior notes for each $1,000 principal amount of unregistered senior notes. | |
Based on interpretations by the staff of the SEC set forth in published no-action letters, we believe you may offer for resale, resell and otherwise freely transfer the registered notes without further registering those registered notes or delivering a prospectus to a buyer, unless you: | ||
• are our “affiliate” within the meaning of Rule 405 promulgated under the Securities Act; | ||
• are acquiring the registered notes in the exchange offers other than in the ordinary course of your business; | ||
• are engaged in, or intend to engage in, the distribution of the registered notes; | ||
• have an arrangement or understanding with any person to engage in the distribution of the registered notes; or | ||
• are a broker-dealer who purchased unregistered notes directly from us for resale pursuant to Rule 144A or any other available exemption under the Securities Act. | ||
However, the SEC has not considered these exchange offers in the context of a no-action letter and we cannot be sure that the staff of the SEC would make a similar determination with respect to the exchange offers as in these other circumstances. Furthermore, you must acknowledge that (i) you are not engaged in, or intending to engage in, a distribution of registered notes, and (ii) you are acquiring the registered notes in your ordinary course of business. If you are a broker-dealer who receives registered notes for your own account pursuant to the exchange offers in exchange for unregistered notes acquired by you as a result of market-making or other trading activities, you must deliver a prospectus in connection with any resale of your registered notes. |
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If you are our affiliate or are a broker-dealer who acquired original unregistered notes directly from us or our affiliates, you may not rely on the SEC staff’s interpretations discussed above and must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction. Such a secondary resale transaction must be covered by an effective registration statement containing the required selling security holder information. | ||
Registration Rights Agreements | We sold the unregistered notes to the initial purchaser on December 21, 2005. The initial purchaser resold the unregistered notes in transactions not requiring registration under the Securities Act. In connection with the initial sale of the unregistered notes, we entered into a registration rights agreement with respect to the unregistered senior secured notes and a separate registration rights agreement with respect to the unregistered senior notes in each case requiring us to make the exchange offers. The registration rights agreements also require us to: | |
• promptly file a registration statement with respect to the exchange offers by May 20, 2006; | ||
• use our reasonable best efforts to cause the registration statement with respect to the exchange offers to become effective under the Securities Act by September 17, 2006; and | ||
• complete the exchange offers no later than 30 business days after the SEC declares the registration statement with respect to the exchange offers effective. | ||
If we do not do so, we will pay special additional interest on the unregistered notes at an initial per week rate of $0.05 per $1,000 principal amount for the first 90 days, and this amount will increase by an additional $0.05 per week for each subsequent 90 day period, up to a maximum of $0.20 per week. | ||
Shelf Registration | In addition, we have agreed, in some circumstances, to file a “shelf registration statement” that would allow some or all of the unregistered notes to be offered to the public. If we do not comply with the foregoing obligations under the registration rights agreements, we will be required to pay liquidated damages to holders of the unregistered notes in the form of additional interest. | |
Expiration Date | The exchange offers will expire at 5:00 p.m., New York City time, , 2006, or a later date and time if we extend it. | |
Withdrawal | You may withdraw the tender of your unregistered notes at any time prior to 5:00 p.m., New York City time, on the expiration date of the exchange offers. We will return to you any of your unregistered notes that we do not accept for exchange for any reason, without expense to you, promptly after the exchange offers expire or terminate. | |
Interest On The Registered Notes and the Unregistered Notes | The registered senior secured notes will bear interest at the rate of 9.5% per year, and the registered senior notes will bear interest at the rate of 9.75% per year . Interest on the registered notes will be payable semi-annually on each April 15 and October 15, with the first payment on October 15, 2006. Accordingly, holders of the unregistered notes |
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that are accepted for exchange will be deemed to have waived the right to receive payment of accrued but unpaid interest on the unregistered notes. Interest on the unregistered notes accepted for exchange will cease to accrue upon issuance of the registered notes. Consequently, if you exchange your unregistered notes for registered notes, you will receive the same interest payment on October 15, 2006, that you would have received if you had not accepted this exchange offer. See “Description of the Registered Senior Secured Notes” and “Description of the Registered Senior Notes.” | ||
No Minimum Condition | We are not conditioning the exchange offers on the tender of any minimum principal amount of unregistered notes. | |
Conditions To The Exchange Offers | The exchange offers are subject to customary conditions, some of which we may waive. We currently anticipate that each of the conditions will be satisfied and that we will not need to waive any conditions. | |
Procedures For Tendering Unregistered Notes | If you wish to accept the exchange offer and tender your unregistered notes, you must: | |
• complete, sign and date the letter of transmittal, or a copy of the letter of transmittal, in accordance with the instructions contained in this prospectus and in the letter of transmittal, and mail or otherwise deliver the letter of transmittal, or the copy, together with the unregistered notes and all other required documentation, to the exchange agent at the address set forth in this prospectus; or | ||
• arrange for The Depository Trust Company to transmit certain required information, including an agent’s message forming part of a book-entry transfer in which you will agree to be bound by the letter of transmittal, to the Exchange Agent in connection with a book-entry transfer. By executing or agreeing to be bound by the letter of transmittal, you will represent to us that, among other things: | ||
��� the registered notes you receive pursuant to the exchange offers are being acquired in the ordinary course of your business; and | ||
• you are not participating, do not intend to participate, and have no arrangement or understanding with any person to participate, in the distribution of the registered notes issued to you in the exchange offer. | ||
Guaranteed Delivery Procedures | If you wish to tender your unregistered notes and time will not permit your required documents to reach the exchange agent by the expiration date, or the procedures for book-entry transfer cannot be completed on time, you may tender your unregistered notes according to the guaranteed delivery procedures described in “The Exchange Offers—Guaranteed Delivery Procedures.” | |
Special Procedure for Beneficial Owners | If you beneficially own unregistered notes that are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and you wish to tender your unregistered notes in the exchange offers, you should promptly contact the person in whose name your outstanding unregistered notes are registered and instruct |
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that person to tender your unregistered notes on your behalf. If you wish to tender on your own behalf, you must, prior to completing and executing the letter of transmittal and delivering your unregistered notes, either arrange to have your unregistered notes registered in your name or obtain a properly completed bond power from the registered holder. The transfer of registered ownership may take considerable time. See “The Exchange Offers — Procedures for Tendering.” | ||
Acceptance of Unregistered Notes and Delivery of Registered Notes | Subject to the satisfaction or waiver of the conditions to the exchange offers, we will accept for exchange any and all unregistered notes which are properly tendered (and are not withdrawn) in the exchange offers prior to 5:00 p.m., New York City time, on , 2006. The registered notes issued pursuant to the exchange offers will be delivered promptly following the expiration date. | |
Exchange Agent | The Bank of New York Trust Company, N.A. is serving as exchange agent for the exchange offers. | |
Use of Proceeds | We will not receive any proceeds from the issuance of the registered notes in the exchange offers. We will pay for our expenses incident to the exchange offers. | |
Federal Income Tax Considerations | The exchange of unregistered notes for registered notes pursuant to the exchange offers will not constitute a taxable exchange for federal income tax purposes. Therefore, you will not have to pay federal income tax as a result of your participation in the exchange offers. See “United States Federal Income Tax Considerations.” | |
Consequences of Failing to Exchange Your Unregistered Notes | The exchange offers satisfy our obligations and your rights under the registration rights agreements. After the exchange offers are completed, you will not be entitled to any registration rights with respect to your unregistered notes. | |
Therefore, if you do not exchange your unregistered notes, you will not be able to reoffer, resell or otherwise dispose of your unregistered notes unless: | ||
• you comply with the registration and prospectus delivery requirements of the Securities Act; or | ||
• you qualify for an exemption from the Securities Act registration requirements. |
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Issuers | The Majestic Star Casino, LLC and its wholly owned subsidiary, The Majestic Star Casino Capital Corp. | |
Registered Senior Secured Notes Offered | $40.0 million aggregate principal amount of 91/2% Senior Secured Notes due 2010. The Issuers previously issued $260.0 million of senior secured notes under the indenture dated October 7, 2003 which, as supplemented, governs the senior secured notes. | |
Maturity Date | October 15, 2010. | |
Interest Rate | We will pay interest on the registered senior secured notes at an annual rate of 9.5%. | |
Interest Payment Dates | We will make interest payments on the registered senior secured notes semiannually, on each April 15 and October 15, beginning October 15, 2006. | |
Guarantees | The registered senior secured notes will be fully, unconditionally, and jointly and severally guaranteed on a senior secured basis by each of our existing and future restricted subsidiaries (other than the corporate senior secured notes co-issuer). The guarantees will rank senior in right of payment to all existing and future subordinated indebtedness of these restricted subsidiaries and will rank equal in right of payment to all existing and future senior indebtedness of these restricted subsidiaries. | |
Collateral | The registered senior secured notes and the guarantees will be secured by, among other assets, equity interests in The Majestic Star Casino, LLC and in the subsidiary guarantors, and substantially all of our and our subsidiary guarantors’ assets, other than the excluded assets. Our senior secured credit facility is also secured by the collateral securing the senior secured notes and the guarantees. The lien on the collateral securing the senior secured credit facility will be senior to the lien on the collateral securing the registered senior secured notes and the guarantees and as a result of such lien seniority, the registered senior |
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secured notes will be effectively subordinated to the senior secured credit facility to the extent of the value of the assets securing such indebtedness. | ||
Ranking | The registered senior secured notes will rank senior in right of payment to all of our existing and future subordinated indebtedness and equal in right of payment with all of our other existing and future senior indebtedness, including the existing senior secured notes and the senior secured credit facility. | |
Intercreditor Agreement | The intercreditor agreement entered into by the trustee under the senior secured notes indenture (as collateral agent) and the agent under the senior secured credit facility contractually subordinates the liens on the collateral securing the senior secured notes and guarantees to the liens on the collateral securing the indebtedness under the senior secured credit facility. The intercreditor agreement, among other things, will limit the trustee’s rights in an event of default under the senior secured notes. In addition, the intercreditor agreement will prevent the trustee and the holders of the notes from pursuing certain remedies with respect to the collateral in an insolvency proceeding. The intercreditor agreement also will provide that the net proceeds from the sale of collateral will first be applied to repay indebtedness outstanding under the senior secured credit facility and thereafter to the holders of the senior secured notes. | |
Optional Redemption | Prior to October 15, 2007, the senior secured notes issuers may redeem up to 35% of the aggregate principal amount of the senior secured notes then outstanding at a redemption price of 109.5% of the principal amount of the senior secured notes, plus accrued and unpaid interest, with the net cash proceeds of certain equity offerings. On or after October 15, 2007, the senior secured notes issuers may redeem all or a portion of the senior secured notes at the following redemption prices, plus accrued and unpaid interest: |
For the Twelve Month Period Beginning October 15 | Percentage | |||
2007 | 104.750 | % | ||
2008 | 102.375 | % | ||
2009 and thereafter | 100.000 | % |
Regulatory Redemption | The registered senior secured notes will be subject to mandatory disposition and redemption requirements following certain determinations by any gaming regulatory authority. | |
Change of Control Offer | If Majestic experiences a change of control, the holders of the registered senior secured notes will have the right to require the senior secured notes issuers to repurchase their registered senior secured notes at a price equal to 101% of the principal amount, plus accrued and unpaid interest to the date of repurchase. | |
Asset Sale Offer | If Majestic sells its assets, or those of its restricted subsidiaries, or experiences an event of loss and does not use the proceeds for specified purposes, the senior secured notes issuers may be required to use the proceeds to offer to repurchase some of the registered senior secured notes at a price equal to 100% of the principal amount, plus accrued and unpaid interest to the date of repurchase. |
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Basic Indenture Covenants | The indenture governing the registered senior secured notes contains covenants limiting the ability of Majestic and its restricted subsidiaries to, among other things: | |
• incur more debt or issue certain equity interests; | ||
• pay dividends, redeem or purchase our equity interests or make other distributions; | ||
• make certain acquisitions or investments; | ||
• use assets as security in other transactions or otherwise create liens; | ||
• enter into transactions with our affiliates; | ||
• merge or consolidate with others; and | ||
• transfer or sell assets, including the equity interests of Majestic’s restricted subsidiaries, or use asset sale proceeds. | ||
These covenants are subject to a number of important limitations and exceptions. See “Description of the Registered Senior Secured Notes.” | ||
Form of the Registered Senior Secured Notes | The registered senior secured notes will be represented by a permanent global note in definitive, fully registered form. The global note will be registered in the name of a nominee of The Depository Trust Company and will be deposited with The Bank of New York Trust Company, N.A., as custodian for The Depository Trust Company’s nominee. | |
Absence of a Public Market for the Unregistered Senior Secured Notes | There has been no public market for the unregistered senior secured notes, and we do not anticipate that an active market for the unregistered senior secured notes will develop. We intend to apply to list the registered senior secured notes on the PORTAL automated quotation system. We cannot make any assurances regarding the liquidity of the market for the registered senior secured notes, your ability to sell your registered senior secured notes or the price at which you may sell your registered senior secured notes. See “Plan of Distribution.” | |
Registered Senior Notes | ||
Issuers | The Majestic Star Casino, LLC and its wholly owned subsidiary, Majestic Star Casino Capital Corp. II. | |
Registered Senior Notes Offered | $200.0 million aggregate principal amount of 93/4% Senior Notes due 2011. | |
Maturity Date | January 15, 2011. | |
Interest Rate | We will pay interest on the registered senior notes at an annual rate of 9.75% | |
Interest Payment Dates | We will make interest payments on the registered senior notes semiannually, on each April 15 and October 15, beginning October 15, 2006. | |
Guarantees | The registered senior notes will be fully, unconditionally, and jointly and severally guaranteed on a senior unsecured basis by each of our existing and future restricted subsidiaries (other than the corporate senior notes co-issuer and the corporate senior secured notes co- |
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issuer). The guarantees will rank senior in right of payment to all existing and future subordinated indebtedness of these restricted subsidiaries and rank equal in right of payment to all existing and future senior indebtedness of these restricted subsidiaries. However, as the guarantees will not be secured, they will be effectively subordinated to all of such subsidiaries’ senior secured indebtedness, including their guarantees in respect of the registered senior secured notes and the senior secured credit facility, to the extent of the value of the assets securing such indebtedness. | ||
Collateral | None. | |
Ranking | The registered senior notes will be the senior unsecured obligations of the senior notes issuers. The registered senior notes will rank equally with all of the existing and future senior obligations of the senior notes issuers and senior to all of their existing and future subordinated indebtedness. However, as the registered senior notes will not be secured, they will be effectively subordinated to all of the senior notes issuers’ senior secured indebtedness, including $300.0 million aggregate principal amount of the senior secured notes and Majestic’s senior secured credit facility, to the extent of the value of the assets securing such indebtedness. | |
Optional Redemption | Prior to October 15, 2008, the senior notes issuers may redeem up to 35% of the aggregate principal amount of the senior notes then outstanding at a redemption price of 109.750% of the principal amount of the senior notes, plus accrued and unpaid interest to the date of redemption with the net cash proceeds of certain equity offerings. On or after October 15, 2008, the senior notes issuers may redeem all or a part of the senior notes at the following redemption prices, plus accrued and unpaid interest: |
For the Twelve Month Period Beginning October 15 | Percentage | |||
2008 | 104.875 | % | ||
2009 | 102.438 | % | ||
2010 and thereafter | 100.000 | % |
Regulatory Redemption | The registered senior notes will be subject to mandatory disposition and redemption requirements following certain determinations by any gaming regulatory authority. | |
Change of Control Offer | If Majestic experiences a change of control, the holders of the registered senior notes will have the right to require the senior notes issuers to repurchase their registered senior notes at a price equal to 101% of the principal amount, plus accrued and unpaid interest to the date of repurchase. | |
Asset Sale Offer | If Majestic sells its assets, or those of its restricted subsidiaries, or experiences an event of loss and does not use the proceeds for specified purposes, the senior notes issuers may be required to use the proceeds to offer to repurchase some of the registered senior notes at a price equal to 100% of the principal amount, plus accrued and unpaid interest to the date of repurchase. |
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Basic Indenture Covenants | The indenture governing the registered senior notes contains covenants limiting the ability of Majestic and its restricted subsidiaries to, among other things: | |
• incur more debt or issue certain equity interests; | ||
• pay dividends, redeem or purchase our equity interests or make other distributions; | ||
• make certain acquisitions or investments; | ||
• use assets as security in other transactions or otherwise create liens; | ||
• enter into certain transactions with our affiliates; | ||
• merge or consolidate with others; and | ||
• transfer or sell assets, including the equity interests of our restricted subsidiaries, or use asset sale proceeds. | ||
These covenants are subject to a number of important limitations and exceptions. See “Description of the Registered Senior Notes.” | ||
Form of the Registered Senior Notes | The registered senior notes will be represented by a permanent global note in definitive, fully registered form. The global note will be registered in the name of a nominee of The Depository Trust Company and will be deposited with The Bank of New York Trust Company, N.A., as custodian for The Depository Trust Company’s nominee. | |
Absence of a Public Market for the Unregistered Senior Notes | There has been no public market for the unregistered senior notes, and we do not anticipate that an active market for the registered senior notes will develop. We intend to apply to list the registered senior secured notes on the PORTAL automated quotation system. We cannot make any assurances regarding the liquidity of the market for the registered senior notes, your ability to sell your registered senior notes or the price at which you may sell your registered senior notes. See “Plan of Distribution.” |
Pro Forma | ||||||
For the | For the | for the | ||||
Year Ended | Three Months Ended | Year Ended | ||||
December 31, 2005 | March 31, 2006 | December 31, 2005 | ||||
Ratio of earnings to fixed charges(1)(2) | A | 1.24x | B |
(A) | Earnings in 2005 were insufficient to cover fixed charges by approximately $2,863,000. | |
(B) | Pro forma earnings in 2005 were insufficient to cover fixed charges by approximately $7,172,000. | |
(1) | For purposes of calculating this ratio, earnings consist of income from continuing operations before equity in earnings (losses) of unconsolidated joint ventures plus amortization of capitalized interest and fixed charges. Fixed charges consist of interest expense and capitalized interest, amortization of original issue discount, amortization of deferred financing costs and the portion of rental expense which we believe to be representative of interest expense. |
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(2) | Included is amortization of original issue discount and financing costs related to the pushdown of the discount notes issued by Majestic Holdco. The pushdown of the amortization of original issue discount and financing costs is required pursuant to SEC Staff Accounting Bulletin Topic 5(J); the amount pushed down for each respective period is $187,000 for the year-ended December 31, 2005, $1,494,000 for the three months ended March 31, 2006 and $6,326,000 for the pro forma year-ended December 31, 2005. |
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• | make it more difficult for us to satisfy our obligations with respect to the notes and our other outstanding indebtedness; | |
• | require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, development projects, acquisitions and other general corporate purposes; | |
• | increase our vulnerability to adverse economic and industry conditions or a downturn in our business; | |
• | result in an event of default if we fail to comply with the financial and other restrictive covenants contained in the indentures governing the notes or our senior secured credit facility, which event of default could result in all of our indebtedness becoming immediately due and payable and would permit some or all of our lenders to foreclose on our assets securing such indebtedness; | |
• | limit our ability to fund or obtain additional financing for future working capital, capital expenditures and other general financial requirements; and | |
• | place us at a competitive disadvantage compared to our competitors that have less debt. |
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• | incur more debt or issue certain equity interests; | |
• | pay dividends, redeem or purchase our equity interests or make other distributions; | |
• | make certain acquisitions or investments; | |
• | use assets as security in other transactions or otherwise create liens; | |
• | enter into transactions with affiliates; | |
• | merge or consolidate with others; and | |
• | transfer or sell assets, including the equity interests of our restricted subsidiaries, or use asset sale proceeds. |
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• | whether any payments under the senior secured notes would be made; | |
• | whether or when the trustee under the indenture governing the senior secured notes could foreclose upon or sell the collateral; | |
• | whether the term or other conditions of the senior secured notes or any rights of the holders of the senior secured notes could be altered in a bankruptcy case without the trustee’s or your consent; | |
• | whether the trustee or you would be able to enforce your rights against the guarantors of the senior secured notes under their guarantees; or | |
• | whether or to what extent holders of the senior secured notes would be compensated for any delay in payment or decline in the collateral’s value. |
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• | the guarantor was insolvent or rendered insolvent by reason of such incurrence; | |
• | the guarantor was engaged in a business or transaction for which its remaining assets constituted unreasonably small capital; or | |
• | the guarantor intended to incur, or believed (or reasonably should have believed) that it would incur, debts beyond its ability to pay as those debts matured. |
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At March 31, 2006 | ||||
(Dollars in millions) | ||||
Cash and cash equivalents | $ | 24.5 | ||
Debt: | ||||
Senior secured credit facility(1) | $ | 28.7 | ||
Senior secured notes(2) | 300.0 | |||
Senior notes | 200.0 | |||
Other debt(3) | 0.3 | |||
Total debt of The Majestic Star Casino, LLC | 529.0 | |||
Discount notes(4) | 46.7 | |||
Total debt | 575.7 | |||
Total member’s deficit | (118.5 | ) | ||
Total capitalization | $ | 457.2 | ||
(1) | The $80.0 million senior secured credit facility, which expires in April 2010, bears interest at the Company’s choice of LIBOR plus a range of 2.50% to 3.00% or Wells Fargo Foothill, Inc.’s base rate plus a range of 0.00% to 0.50%. The range is based on the Company’s EBITDA (as defined in the senior secured credit facility). | |
(2) | Inclusive of $260.0 million of the existing senior secured notes previously registered and $40.0 million of unregistered senior secured notes which contain substantially similar terms. | |
(3) | Capital lease obligations. | |
(4) | Reflects $63.5 million, net of original issue discount, of discount notes issued by Majestic Holdco. The discount notes pay in kind interest semi-annually on April 15 and October 15 of each year. The discount notes will accrete in value for three years. On April 15, 2009, Majestic Holdco will begin cash paying interest on the discount notes. The discount notes are structurally subordinated to all the Company’s indebtedness (including the senior secured credit facility, the senior secured notes and the senior notes) and are effectively subordinated in respect of the capital stock of the Company to the senior secured credit facility and the senior secured notes. The discount notes have been “pushed-down” to the Company pursuant to guidelines of SEC Staff Accounting Bulletin Topic 5(J). |
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for the Year Ended December 31, 2005
Trump Indiana | Trump Indiana | |||||||||||||||||||
Majestic | Historical | Historical | Total | Majestic | ||||||||||||||||
Historical | (Predecessor) | (Reorganized) | Adjustments | Pro Forma | ||||||||||||||||
(In dollars) | ||||||||||||||||||||
OPERATING REVENUES: | ||||||||||||||||||||
Casino | 280,918,520 | 53,027,254 | 82,344,508 | — | 416,290,282 | |||||||||||||||
Rooms | 7,726,464 | 1,094,586 | 1,885,175 | — | 10,706,225 | |||||||||||||||
Food and beverage | 14,030,267 | 1,212,025 | 1,814,304 | — | 17,056,596 | |||||||||||||||
Other | 4,965,862 | 748,151 | 1,325,769 | 589,579 | (a) | 7,629,361 | ||||||||||||||
Gross revenues | 307,641,113 | 56,082,016 | 87,369,756 | 589,579 | 451,682,464 | |||||||||||||||
Less promotional allowances | 45,669,261 | 4,665,279 | 7,203,847 | — | 57,538,387 | |||||||||||||||
Net operating revenues | 261,971,852 | 51,416,737 | 80,165,909 | 589,579 | 394,144,077 | |||||||||||||||
OPERATING COSTS AND EXPENSES: | ||||||||||||||||||||
Casino | 67,910,637 | 9,471,673 | 14,517,615 | (382,294 | )(a) | 91,517,631 | ||||||||||||||
Rooms | 1,763,340 | 789,047 | 1,256,726 | — | 3,809,113 | |||||||||||||||
Food and beverage | 5,865,541 | 1,621,514 | 2,396,612 | (43,154 | )(a) | 9,840,513 | ||||||||||||||
Other | 1,040,514 | 119,137 | 197,910 | 94,099 | (a) | 1,451,660 | ||||||||||||||
Gaming taxes | 61,053,037 | 15,087,990 | 23,285,981 | — | 99,427,008 | |||||||||||||||
Advertising and promotion | 15,230,150 | 1,187,444 | 1,901,786 | (23,860 | )(a) | 18,295,520 | ||||||||||||||
General and administrative | 42,931,535 | 9,396,306 | 13,344,324 | 544,517 | (a) | 63,766,623 | ||||||||||||||
— | — | — | (2,352,837 | )(o) | — | |||||||||||||||
— | — | — | (97,222 | )(i) | — | |||||||||||||||
Corporate expense | 7,717,108 | 2,216,625 | 3,778,863 | (5,995,488 | )(b) | 7,717,108 | ||||||||||||||
Economic incentive tax—City of Gary | 4,709,154 | 2,151,581 | 3,295,377 | (2,697,283 | )(c) | 7,458,829 | ||||||||||||||
Depreciation and amortization | 22,612,185 | 2,733,086 | 8,989,074 | 4,708,033 | (a) | 34,648,212 | ||||||||||||||
— | — | — | (1,042,039 | )(d) | — | |||||||||||||||
— | — | — | 605,573 | (o) | — | |||||||||||||||
— | — | — | (49,720 | )(r) | — | |||||||||||||||
— | — | — | (269,160 | )(e) | — | |||||||||||||||
— | — | — | (4,575,083 | )(f) | — | |||||||||||||||
— | — | — | 936,263 | (h) | — | |||||||||||||||
Amortization—debt pushed down from Majestic Holdco | 19,519 | — | — | — | 19,519 | |||||||||||||||
Loss on investment in Buffington Harbor Riverboats, LLC | 2,354,799 | 931,706 | 1,428,160 | (4,714,665 | )(a) | — | ||||||||||||||
Loss on disposal of assets | 52,790 | (132,789 | ) | 98,415 | (600 | )(a) | 17,816 | |||||||||||||
Total operating costs and expenses | 233,260,309 | 45,573,320 | 74,490,843 | (15,354,920 | ) | 337,969,552 | ||||||||||||||
Operating income | 28,711,543 | 5,843,417 | 5,675,066 | 15,944,499 | 56,174,525 | |||||||||||||||
OTHER INCOME (EXPENSE): | ||||||||||||||||||||
Interest income | 332,335 | 45,757 | 168,128 | — | 546,220 | |||||||||||||||
Interest expense | (30,362,182 | ) | (3,243,714 | ) | (8,068,313 | ) | 11,296,127 | (k) | (53,802,556 | ) | ||||||||||
— | — | — | (429,872 | )(a) | — | |||||||||||||||
— | — | — | 86,847 | (q) | — | |||||||||||||||
— | — | — | (22,652,777 | )(m) | — | |||||||||||||||
— | — | — | (2,279,489 | )(g) | — | |||||||||||||||
— | — | — | 1,850,817 | (n) | — | |||||||||||||||
Interest expense—debt pushed down from Majestic Holdco | (167,520 | ) | — | — | (5,649,866 | )(l) | (6,306,666 | ) | ||||||||||||
— | — | — | (489,280 | )(s) | — | |||||||||||||||
Loss on extinguishment of debt | (3,688,480 | ) | — | — | — | (3,688,480 | ) | |||||||||||||
Other non-operating expense | (127,386 | ) | — | (59,240 | ) | (2,781 | )(a) | (189,407 | ) | |||||||||||
Total other expense | (34,013,233 | ) | (3,197,957 | ) | (7,959,425 | ) | (18,270,275 | ) | (63,440,890 | ) | ||||||||||
Income (loss) from continuing operations before taxes | (5,301,690 | ) | 2,645,460 | (2,284,359 | ) | (2,325,775 | ) | (7,266,364 | ) | |||||||||||
Provision for income taxes | — | (24,112,211 | ) | (2,938,010 | ) | 27,050,221 | (p) | — | ||||||||||||
Income (loss) from continuing operations | (5,301,690 | ) | (21,466,751 | ) | (5,222,369 | ) | 24,724,446 | (7,266,364 | ) | |||||||||||
Extraordinary gain (loss) | — | — | 10,000 | — | 10,000 | |||||||||||||||
Reorganization (expense) income | — | 135,925,789 | (10,000 | ) | (135,915,789 | )(j) | — | |||||||||||||
Net (loss) income | (5,301,690 | ) | 114,459,038 | (5,222,369 | ) | (111,191,343 | ) | (7,256,364 | ) | |||||||||||
Ratio of earnings to fixed charges(4) | A | B | ||||||||||||||||||
which are an integral part of these statements
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1. | Basis of Presentation |
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2. | Preliminary Purchase Price Allocation |
Cash consideration for shares of Trump Indiana | $ | 241,626 | ||
Estimated value of debt assumed | 6,457 | |||
Estimated transaction costs and expenses | 2,784 | |||
Preliminary purchase price | $ | 250,867 | ||
Current assets | $ | 17,308 | ||
Property, equipment & improvements | 82,832 | |||
Goodwill & other intangible assets | 164,553 | |||
Other assets | 1,612 | |||
Assumed liabilities | (15,438 | ) | ||
$ | 250,867 | |||
3. | Pro Forma Adjustments |
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4. | Ratio of Earnings to Fixed Charges |
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For the Three Months | ||||||||||||||||||||||||||||
For the Year Ended December 31, | Ended March 31, | |||||||||||||||||||||||||||
2001(1) | 2002 | 2003 | 2004 | 2005(2) | 2005 | 2006 | ||||||||||||||||||||||
Statements of Operations Data: | ||||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||
Casino | $ | 130,198 | $ | 256,828 | $ | 255,386 | $ | 274,769 | $ | 280,919 | $ | 71,083 | $ | 103,886 | ||||||||||||||
Rooms | 544 | 8,161 | 7,933 | 7,673 | 7,726 | 1,794 | 2,764 | |||||||||||||||||||||
Food and beverage | 2,356 | 12,813 | 12,800 | 13,462 | 14,030 | 3,510 | 4,355 | |||||||||||||||||||||
Other | 1,824 | 3,506 | 3,966 | 4,579 | 4,966 | 1,058 | 1,748 | |||||||||||||||||||||
Gross revenues | 134,922 | 281,308 | 280,085 | 300,483 | 307,641 | 77,445 | 112,753 | |||||||||||||||||||||
Less: promotional allowances | 7,717 | 34,980 | 35,130 | 39,972 | 45,669 | 10,590 | 12,835 | |||||||||||||||||||||
Net revenues | 127,205 | 246,328 | 244,955 | 260,511 | 261,972 | 66,855 | 99,918 | |||||||||||||||||||||
Costs and expenses: | ||||||||||||||||||||||||||||
Casino | 26,870 | 67,843 | 67,384 | 69,793 | 67,911 | 17,293 | 22,931 | |||||||||||||||||||||
Rooms | 188 | 2,684 | 2,552 | 1,784 | 1,763 | 384 | 1,184 | |||||||||||||||||||||
Food and beverage | 2,604 | 5,824 | 5,263 | 6,124 | 5,866 | 1,501 | 2,116 | |||||||||||||||||||||
Other | 69 | 1,030 | 1,180 | 1,656 | 1,041 | 259 | 258 | |||||||||||||||||||||
Gaming taxes | 34,695 | 48,671 | 55,252 | 59,180 | 61,053 | 15,298 | 24,423 | |||||||||||||||||||||
Advertising and promotion | 8,200 | 16,138 | 14,666 | 16,270 | 15,230 | 3,494 | 4,150 | |||||||||||||||||||||
General and administrative | 23,642 | 41,180 | 39,653 | 43,639 | 42,931 | 10,407 | 15,029 | |||||||||||||||||||||
Corporate expense | — | 2,760 | 3,456 | 3,399 | 7,717 | 1,197 | 1,818 | |||||||||||||||||||||
Economic incentive—City of Gary | 3,667 | 3,981 | 4,103 | 4,494 | 4,709 | 1,163 | 1,807 | |||||||||||||||||||||
Depreciation and amortization | 8,823 | 18,125 | 17,489 | 17,986 | 22,612 | 4,636 | 7,773 | |||||||||||||||||||||
Loss on investment in BHR | 2,798 | 2,424 | 2,395 | 2,466 | 2,355 | 606 | — | |||||||||||||||||||||
(Gain) loss on disposal of assets | 12 | 5 | 117 | (31 | ) | 53 | — | (15 | ) | |||||||||||||||||||
Pre-opening expenses | 1,018 | 13 | — | — | — | — | — | |||||||||||||||||||||
Total costs and expenses | 112,586 | 210,678 | 213,510 | 226,760 | 233,241 | 56,238 | 81,474 | |||||||||||||||||||||
Income from operations | 14,619 | 35,650 | 31,445 | 33,751 | 28,731 | 10,617 | 18,444 | |||||||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||||||
Interest income | 400 | 181 | 104 | 111 | 332 | 12 | 136 | |||||||||||||||||||||
Interest expense | (16,026 | ) | (32,406 | ) | (31,283 | ) | (28,641 | ) | (30,362 | ) | (7,236 | ) | (13,314 | ) | ||||||||||||||
Interest expense—debt from Majestic Holdco(3) | — | — | — | — | (187 | ) | — | (1,494 | ) | |||||||||||||||||||
(Loss) gain on early extinguishment of debt | — | 69 | (31,960 | ) | — | (3,689 | ) | — | — | |||||||||||||||||||
Other non-operating expenses | (149 | ) | (183 | ) | (185 | ) | (202 | ) | (127 | ) | (37 | ) | (27 | ) | ||||||||||||||
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For the Three Months | ||||||||||||||||||||||||||||
For the Year Ended December 31, | Ended March 31, | |||||||||||||||||||||||||||
2001(1) | 2002 | 2003 | 2004 | 2005(2) | 2005 | 2006 | ||||||||||||||||||||||
Total other income (expense) | (15,775 | ) | (32,339 | ) | (63,324 | ) | (28,732 | ) | (34,033 | ) | (7,261 | ) | (14,699 | ) | ||||||||||||||
(Loss) income from continuing operations | (1,156 | ) | 3,311 | (31,879 | ) | 5,019 | (5,302 | ) | 3,356 | 3,745 | ||||||||||||||||||
Income (loss) from discontinued Operations | (395 | ) | (1,995 | ) | (11,973 | ) | — | — | — | — | ||||||||||||||||||
Net (loss) income | $ | (1,551 | ) | $ | 1,316 | (43,852 | ) | $ | 5,019 | $ | (5,302 | ) | $ | 3,356 | $ | 3,745 | ||||||||||||
Ratio of earnings to fixed charges(4) | 1.09 | x | 1.15 | x | A | 1.23 | x | B | 1.49 | x | 1.24 | x | ||||||||||||||||
As of December 31, | As of March 31, | |||||||||||||||||||||||
2001 | 2002 | 2003 | 2004 | 2005 | 2006 | |||||||||||||||||||
Balance Sheets Data: | ||||||||||||||||||||||||
Cash and cash equivalents | $ | 25,925 | $ | 24,548 | $ | 22,058 | $ | 16,722 | $ | 32,368 | $ | 24,497 | ||||||||||||
Restricted cash | 1,000 | 1,250 | 1,400 | 2,540 | 3,190 | 3,327 | ||||||||||||||||||
Investment in BHR, net | 33,899 | 31,833 | 29,734 | 27,432 | — | — | ||||||||||||||||||
Total assets(3) | 291,076 | 275,810 | 233,215 | 246,376 | 517,959 | 511,236 | ||||||||||||||||||
Current liabilities | 37,160 | 25,458 | 33,666 | 31,918 | 46,073 | 54,190 | ||||||||||||||||||
Long-term debt(3) | 273,897 | 274,529 | 301,715 | 316,858 | 592,700 | 575,508 | ||||||||||||||||||
Total liabilities | 311,057 | 299,985 | 335,382 | 348,776 | 638,773 | 629,698 | ||||||||||||||||||
Member’s deficit | (19,981 | ) | (24,175 | ) | (102,167 | ) | (102,400 | ) | �� | (120,814 | ) | (118,462 | ) |
(1) | The Company completed the acquisition of the Fitzgeralds brand casinos on December 6, 2001. As such, our 2001 statement of operations data includes the operations of our Fitzgeralds brand casinos for 25 days. | |
(2) | The Company completed the acquisition of Trump Indiana, and its fifty percent interests that Trump Indiana owned in BHR and BHPA, on December 21, 2005. As such, our 2005 statement of operations data includes the operations of Trump Indiana and of BHR and BHPA for the last eleven days of 2005. | |
(3) | The Company’s balance sheet data as of December 31, 2005 and March 31, 2006 includes the $63.5 million of discount notes issued by Majestic Holdco, net of original issue discount of $18.2 and $16.8 million at December 31, 2005 and March 31, 2006, respectively, issued in connection with the acquisition of Trump Indiana. The discount notes are solely the obligation of Majestic Holdco and Majestic Holdco, Inc. (the co-issuer with Majestic Holdco) and are unsecured. Neither the Company nor any of its direct or indirect subsidiaries guarantees the discount notes nor are the equity or assets of the Company or its direct or indirect subsidiaries security for the discount notes. Further, the indentures governing the senior secured notes and the senior notes and the loan and security agreement which governs our senior secured credit facility preclude distributions by the Company to Majestic Holdco unless certain financial tests are met. In addition to the “push-down” of the discount notes, the Company is also reflecting $2.8 million of discount notes issuance costs, net of amortization, as of December 31, 2005 and March 31, 2006, respectively, in its balance sheet data, and amortization of issuance costs of $20,000 and interest expense of $0.2 million for the year ended December 31, 2005, and amortization of issuance costs of $0.1 million and interest expense of $1.4 million for the three month period ended March 31, 2006, in its statement of operations data. The discount notes have been “pushed-down” to the Company pursuant to the guidelines of SEC Staff Accounting Bulletin Topic 5(J). | |
(4) | For purposes of calculating this ratio, earnings consist of income from continuing operations before equity in earnings (losses) of unconsolidated joint ventures plus amortization of capitalized interest and fixed charges. Fixed charges consist of interest expense and capitalized interest, amortization of original issue discount, amortization of deferred financing costs and the portion of rental expense representative of interest expense. | |
Included is amortization of original issue discount and financing costs related to the pushdown of the discount notes issued by Majestic Holdco. The pushdown of the amortization of original issue discount and financing |
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costs is required pursuant to SEC Staff Accounting Bulletin Topic 5(J). The amount pushed down for each respective period is $0.2 million for the year ended December 31, 2005 and $1.5 million for the three months ended March 31, 2006. | ||
(A) Earnings in 2003 were insufficient to cover fixed charges by approximately $29.4 million. | ||
(B) Earnings in 2005 were insufficient to cover fixed charges by approximately $2.9 million. |
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• | casino revenues, which include revenues from slot machines and table games; | |
• | food and beverage revenues; | |
• | hotel revenues; and | |
• | retail, entertainment and other revenues. |
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• | Consolidated gross operating revenues increased for the first quarter of 2006 by $35.3 million, or 45.6% to $112.8 million and the year ended December 31, 2005 by $7.2 million, or 2.4%, to $307.6 million, compared to the prior periods principally due to the acquisition of Majestic Star II. Majestic Star II contributed $36.6 million of the increase in gross revenues in the three-month period ended March 31, 2006 and $4.9 million of the increase in gross revenues for the year ended December 31, 2005. Majestic Star II was included only for the last 11 days of 2005. Fitzgeralds Tunica also contributed improved gross revenues of $1.1 million during the three-month period ended March 31, 2006, primarily due to stronger casino and room revenues whereas both Fitzgeralds Black Hawk and Majestic Star experienced lower gross revenues of $0.4 million and $2.2 million, respectively, for the three-month period ended March 31, 2006 when compared to the same three-month period last year, primarily due to lower casino revenues. For the year ended December 31, 2005 compared to the year ended December 31, 2004, Majestic Star’s and Fitzgeralds Tunica’s gross revenues increased $1.2 million and $1.5 million, respectively, while Fitzgeralds Black Hawk’s gross revenues declined by $0.6 million. At Majestic Star and Fitzgeralds Tunica, for the year ended December 31, 2005, the primary contributor to increased gross revenues were higher casino revenues. At Fitzgeralds Black Hawk, the primary reason for the decline in gross revenues was a decline in casino revenues. | |
• | In the three-month period ending March 31, 2006, consolidated casino revenues increased by $32.8 million, or 46.1%, to $103.9 million from the same three-month period last year. Majestic Star II contributed $34.7 million of the increase in casino revenues. Casino revenues at Fitzgeralds Tunica increased $0.8 million due to greater slot coin-in and slot win percentages of 1.4% and 2.7%, respectively, from the first quarter of 2005. These increases in casino revenues were offset by declines at Majestic Star of $2.2 million and $0.4 million at Fitzgeralds Black Hawk. The decline at Majestic Star was due to a $1.4 million decrease in table games revenue caused by a 19.8% decline in drop and a 1.6% decline in win percentage, and a $0.8 million decline in slot revenue resulting from a decrease in slot coin-in of 8.2%, offset by a 6.3% improvement in win percentage. Fitzgeralds Black Hawk’s decline in casino revenues of $0.4 million was mostly due to lower slot coin-in of 2.4% and lower slot win percentage of 1.1%. For the year ended December 31, 2005, consolidated casino revenues increased $6.1 million, or 2.2%, to $280.9 million when compared to the year ended December 31, 2004. Majestic Star II contributed $4.6 million of the increase in consolidated casino revenues due to its 11 days of operations included in 2005. Majestic Star, Fitzgeralds Tunica and Fitzgeralds Black Hawk, combined, generated $1.5 million of increased casino revenues, which is principally the result of stronger win percentages in slot and table games. | |
• | Consolidated net income for the first quarter of 2006 improved to $3.7 million over the $3.4 million reported in the prior first quarter period. The principal factors were the addition of Majestic Star II and of the 50% of BHR and BHPA that we did not own in the prior year, the concurrent refinancing of debt, and the additional debt incurred, along with the associated interest and amortization of financing costs, as a result of the previously mentioned acquisition and refinancing transactions. Additionally affecting our net income in the three-month period ended March 31, 2005 was $0.6 million of depreciation and amortization expense not recorded at Fitzgeralds Black Hawk. On July 12, 2004, Fitzgeralds Black Hawk stopped depreciating and amortizing its fixed and intangible assets in conjunction with the sale of substantially all of its assets. Since the sale was terminated in April 2005, normal depreciation and amortization was recorded in the first quarter of 2006. Our consolidated net loss for the year ended December 31, 2005 was $5.3 million compared to a consolidated net income of $5.0 million for the year ended December 31, 2004. Our decline from net income in 2004 to a net loss in 2005 was due to a number of reasons. We had a $5.6 million increase in promotional allowances necessary to compete in our markets, $2.3 million in costs related to the cancellation of the Fitzgeralds Black Hawk sale and additional depreciation and amortization of $0.9 million taken in 2005 related to the cancellation of the Fitzgeralds Black Hawk sale. We also incurred $1.1 million in expense in preparation for compliance with Sarbanes Oxley Section 404, $3.7 million of additional depreciation and |
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amortization expense incurred on new assets purchased during 2005, the addition of the Majestic Star II vessel, buildings and equipment on December 21, 2005, and amortization of financing costs and intangibles related to the Acquisition. We had $1.7 million of increased interest expense on our senior secured credit facility, resulting from higher interest rates on our debt that are tied to LIBOR and prime rate borrowings, the issuance of the senior notes and the unregistered senior secured notes, the pushdown of discount notes interest, a loss on early extinguishment of debt of $1.6 million incurred when the Company defeased the remaining Investor Notes, and a loss of $2.1 million related to the early extinguishment of debt related to BHPA. Those increases were offset by a decline in casino expenses during 2005 of $1.9 million, advertising and promotional expenses of $1.0 million and general and administrative expenses of $0.7 million. |
• | The financial performance of Majestic Star and Majestic Star II (the “Majestic Properties”) was negatively impacted during the first quarter of 2006 due to the significant time and effort invested in implementing the integration plan for Trump Indiana. In addition, casino revenues at our Majestic Properties declined by 21.7% in April 2006 from April 2005. For all of the northwest Indiana casino operators, casino revenues declined 1.7% in April 2006 from April 2005. Below we outline influences that we believe impacted our operations at our Majestic Properties and the strategies that we are undertaking to address these influences. Many of the programs take time to implement and time to gain customer acceptance. Additionally, the Majestic Properties will continue to be subject to the enhanced marketing, promotions and amenities offered by our competitors. There is no guarantee that our immediate plans will improve our casino revenues and our cash flows in the near term or on a permanent basis. | |
• | At the Majestic Properties, in conjunction with our integration of Trump Indiana and part of our plan to reduce costs, we eliminated 300 positions (exclusive of 200 positions eliminated through natural attrition), resulting in severance costs of $1.1 million which were recorded as goodwill. A top priority is now the combining and transitioning of the Majestic Star, Majestic Star II and BHR management teams and workforce. | |
• | At the Majestic Properties there continues to be some continuing disruption to our guests while we reconfigure the layout of the casino floors. The reconfiguration has taken longer than anticipated due to the required approvals from the Indiana gaming regulators. | |
• | The new casino and amenities at Boyd Gaming’s Blue Chip Casino have impacted our operations at the Majestic Properties. Recently, Harrah’s Entertainment announced plans for a $485.0 million expansion project at its Horseshoe Casino in Hammond, Indiana. Greater levels of marketing and advertising from our competitors and a significant reduction in our direct mail and cash based promotional activities relative to what was incurred in the prior year by Majestic Star and Trump Indiana have impacted our operating results. | |
• | The financial performance of the Majestic Properties has also been and will continue to be affected by construction to major roads providing access to our gaming facilities at Buffington Harbor. | |
• | We are introducing new programs and enhancing existing programs to address those factors within our control which have impacted the performance of the Majestic Properties, including, enhancing our database marketing, establishing new promotions and enhanced and target marketing, enhancing our bus programs from Chicago, improving our guest development and hosting programs, opening a non-smoking gaming floor, restructuring our complimentary program, establishing new employee incentive and reward programs and creating a feeling of difference between each of the Majestic Properties so that we are offering our guests a choice between two casinos at one location. | |
• | Consolidated promotional allowances, which are deducted from consolidated gross revenues to calculate consolidated net revenues, increased $2.2 million in the first quarter of 2006 from the first quarter of 2005, and increased $5.6 million in the year ended December 31, 2005 from the year ended December 31, 2004. These will most likely continue to increase due to the addition of Majestic Star II, the enhanced promotional efforts at the Majestic Properties, as described above, and increased promotions at our Fitzgeralds Tunica and Fitzgeralds Black Hawk properties. We believe that increased promotional efforts will be necessary to remain competitive in our markets. |
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• | As a result of our acquisition of Trump Indiana and the inclusion of the expenses of BHR and BHPA we will see a significant increase in operating expenses. In our first full quarter of operating Majestic Star II, and the 50% of BHR and BHPA that we acquired from Trump Indiana, operating expenses increased by $26.8 million. Part of this increase should be offset by the realization of the expected $14.4 million of cost savings on an annualized basis at the Majestic Properties due to eliminating redundant costs and expenses, including the staff reductions discussed previously. | |
• | As our casinos attract their visitors from drive-in markets, higher energy and fuel costs experienced by our customers could result in fewer trips to our properties and less discretionary spending on gambling. We believe these higher costs have impacted the results of operations at our Majestic Properties and may be impacting the frequency of trips and the discretionary gambling budgets of our customers at our Fitzgeralds Tunica and Fitzgeralds Black Hawk properties. | |
• | Interest expense increased $7.6 million during the first quarter of 2006, primarily due to the debt incurred to finance the acquisition of Trump Indiana (including $1.5 million attributable to the push-down of the Majestic Holdco debt). Interest expense will continue to be impacted by the increased amount of debt compared with prior periods and, to the extent of the borrowings under our senior secured credit facility, higher interest rates as those rates are tied to LIBOR and prime rate borrowings. | |
• | Various remodel and expansion projects have been recently completed by our competitors in the Black Hawk market, as well as increased marketing activities. Although Fitzgeralds Black Hawk saw record breaking revenues in 2004 due to the disruption of business from the competitors who were undergoing construction projects, if the level of competition in the Black Hawk market continues to increase, our financial performance and cash flows may be negatively impacted. | |
• | We continue the implementation of TITO at our properties. As of March 31, 2006, we had 819, or 62.9%, of our slot machines at Fitzgeralds Tunica equipped with TITO and 282, or 47.1%, of our slot machines at Fitzgeralds Black Hawk equipped with TITO. At Majestic Star and Majestic Star II, all of our slot machines are TITO equipped. It is our goal to have 100% of our slot machines at all of our properties equipped with TITO by year end. | |
• | Kirk C. Saylor has joined the organization as its new Executive Vice President and Chief Operating Officer (COO) effective May 15, 2006. Mr. Saylor will play an integral role in developing the strategies for the continued growth and success of the Company. Mr. Saylor has over twenty years of experience, including key positions in both operations and finance in large, nationally recognized gaming companies. | |
• | During the first quarter of 2006 we transitioned in a new management team at Fitzgeralds Tunica. The new management team is implementing changes to the property to make it more competitive in the Tunica market. A new advertising program has recently been implemented. Management is also currently enhancing the property’s direct mail, guest development and hosting programs. Improvements have already been made to the food and beverage operations including the upgrading of our steakhouse, now known as Don B’s. Property management is attempting to upgrade the property in order to attract a higher level of rated play. As management proceeds with its improvement strategies, additional capital and operating costs may be necessary in the near term in order to generate greater revenues over the long term. We will also look to make improvements to the hotel and casino floor in order to offer the amenities and games that our current and future customers desire. Budgets and timelines for completion of these projects are still under review by management. | |
• | The expansion plans for Fitzgeralds Black Hawk are scheduled to begin in the third quarter of this year and should be completed within 15 to 18 months at a cost of approximately $25.0 million, including acquiring associated gaming equipment and other furniture and fixtures. This expansion will not only add more amenities for our guests, but will also increase the number of slot machines from approximately 600 to approximately 1,000, which will all be TITO. Fitzgeralds Black Hawk also intends to rebuild the Rohling Inn; although insurance proceeds will fund all or a portion of the construction costs, the Company will be required to advance the funds and, to the extent the insurance proceeds are insufficient, the Company may need to delay other capital expenditures. |
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• | The Company is evaluating the construction of a hotel and other improvements at the Buffington Harbor site of Majestic Star and Majestic Star II. Designs, budgets and timelines are still being reviewed. These projects could be funded under the Company’s capital expenditure plan, which is limited by the Company’s senior secured credit facility, through other public and private investments, and the Gary Lake Front Development Fund for which the Majestic Properties pay into as part of their amended development agreement with the City of Gary. | |
• | Recently the new Mayor of the City of Gary has expressed concerns about the amended development agreement between the City of Gary and Majestic Star. The Company believes it has a valid and binding agreement with the City of Gary; however the Company plans to work with the City of Gary and the Mayor on options to resolve any issues raised by the Mayor. |
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For the Three Months Ended March 31, | ||||||||
2006 | 2005 | |||||||
(In thousands) | ||||||||
Gross revenues: | ||||||||
Majestic Star Casino | $ | 37,636 | $ | 39,805 | ||||
Majestic Star Casino II | 36,633 | — | ||||||
Buffington Harbor Riverboats | 119 | — | ||||||
Total Majestic Properties | 74,388 | 39,805 | ||||||
Fitzgeralds Tunica | 28,297 | 27,166 | ||||||
Fitzgeralds Black Hawk | 10,068 | 10,474 | ||||||
Total | $ | 112,753 | $ | 77,445 | ||||
Net revenues: | ||||||||
Majestic Star Casino | $ | 35,108 | $ | 36,176 | ||||
Majestic Star Casino II | 34,284 | — | ||||||
Buffington Harbor Riverboats | 119 | — | ||||||
Total Majestic Properties | 69,511 | 36,176 | ||||||
Fitzgeralds Tunica | 21,733 | 21,516 | ||||||
Fitzgeralds Black Hawk | 8,674 | 9,163 | ||||||
Total | $ | 99,918 | $ | 66,855 | ||||
Casino revenues: | ||||||||
Majestic Star Casino | $ | 36,449 | $ | 38,697 | ||||
Majestic Star Casino II | 34,680 | — | ||||||
Total Majestic Properties | 71,129 | 38,697 | ||||||
Fitzgeralds Tunica | 23,352 | 22,585 | ||||||
Fitzgeralds Black Hawk | 9,404 | 9,801 | ||||||
Total | $ | 103,885 | $ | 71,083 | ||||
Operating income (loss): | ||||||||
Majestic Star Casino | $ | 9,248 | $ | 5,628 | ||||
Majestic Star Casino II | 9,519 | — | ||||||
Buffington Harbor Riverboats | (3,541 | ) | — | |||||
Buffington Harbor Parking Associates | (361 | ) | — | |||||
Total Majestic Properties | 14,865 | 5,628 | ||||||
Fitzgeralds Tunica | 3,679 | 3,305 | ||||||
Fitzgeralds Black Hawk | 1,742 | 2,971 | ||||||
Corporate (1) | (1,842 | ) | (1,217 | ) | ||||
Majestic Investor Holdings | — | (70 | ) | |||||
Total | $ | 18,444 | $ | 10,617 | ||||
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As of March 31, | ||||||||
2006 | 2005 | |||||||
Operating Margin(2) | ||||||||
Majestic Star Casino | 26.3 | % | 15.6 | % | ||||
Majestic Star Casino II | 27.8 | % | n/a | |||||
Buffington Harbor Riverboats | (2967.6 | )% | n/a | |||||
Buffington Harbor Parking Associates | n/a | n/a | ||||||
Total Majestic Properties | 21.4 | % | 15.6 | % | ||||
Fitzgeralds Tunica | 16.9 | % | 15.4 | % | ||||
Fitzgeralds Black Hawk | 20.1 | % | 32.4 | % | ||||
Corporate | n/a | n/a | ||||||
Majestic Investor Holdings | n/a | n/a | ||||||
Total | 18.5 | % | 15.9 | % | ||||
As of March 31, | As of December 31, | |||||||
2006 | 2005 | |||||||
(in thousands) | ||||||||
Segment assets: | ||||||||
Majestic Star Casino (3) | $ | 117,469 | $ | 243,475 | ||||
Majestic Star Casino II | 225,598 | 229,246 | ||||||
Buffington Harbor Riverboats | 53,015 | 53,751 | ||||||
Buffington Harbor Parking Associates | 22,002 | 21,592 | ||||||
Fitzgeralds Tunica | 73,704 | 75,406 | ||||||
Fitzgeralds Black Hawk | 37,338 | 31,688 | ||||||
Corporate(3) | 381,254 | 289,353 | ||||||
Majestic Investor Holdings | — | 1,896 | ||||||
Total | 910,380 | 946,407 | ||||||
Less: Intercompany | (399,144 | ) | (428,448 | ) | ||||
Total | $ | 511,236 | $ | 517,959 | ||||
As of March 31, | ||||||||
2006 | 2005 | |||||||
(in thousands) | ||||||||
Expenditures for additions to long-lived assets: | ||||||||
Majestic Star Casino | $ | 2,077 | $ | 891 | ||||
Majestic Star Casino II | 76 | n/a | ||||||
Buffington Harbor Riverboats | 13 | n/a | ||||||
Fitzgeralds Black Hawk | 489 | 407 | ||||||
Fitzgeralds Tunica | 502 | 1,850 | ||||||
Corporate | 5 | — | ||||||
Total | $ | 3,162 | $ | 3,148 | ||||
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(1) | Corporate expenses reflect payroll, benefits, travel and other costs associated with our corporate staff and are not allocated to the properties. | |
(2) | Operating margin is calculated by dividing operating income by net revenues. | |
(3) | The combined assets of Majestic Star and Corporate include inter-company receivables from Majestic Star II, Fitzgeralds Tunica, BHR, BHPA and Fitzgeralds Black Hawk totaling approximately $399.1 million at March 31, 2006 and $428.4 million at December 31, 2005. Intercompany receivables are eliminated in consolidation. |
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For the Years Ended December 31, | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
Operating Revenues: | ||||||||||||
Casino | 91.3 | % | 91.4 | % | 91.2 | % | ||||||
Rooms | 2.5 | % | 2.6 | % | 2.8 | % | ||||||
Food and beverage | 4.6 | % | 4.5 | % | 4.6 | % | ||||||
Other | 1.6 | % | 1.5 | % | 1.4 | % | ||||||
Gross operating revenues | 100.0 | % | 100.0 | % | 100.0 | % | ||||||
Less promotional allowances | 14.8 | % | 13.3 | % | 12.5 | % | ||||||
Net operating revenues | 85.2 | % | 86.7 | % | 87.5 | % | ||||||
Operating Costs and Expenses: | ||||||||||||
Casino | 22.1 | % | 23.2 | % | 24.1 | % | ||||||
Rooms | 0.6 | % | 0.6 | % | 0.9 | % | ||||||
Food and beverage | 1.9 | % | 2.1 | % | 1.9 | % | ||||||
Other | 0.3 | % | 0.6 | % | 0.4 | % | ||||||
Gaming taxes(1) | 19.8 | % | 19.7 | % | 19.7 | % | ||||||
Advertising and promotion | 5.0 | % | 5.4 | % | 5.2 | % | ||||||
General and administrative(2) | 14.0 | % | 14.5 | % | 14.2 | % | ||||||
Corporate expenses(3) | 2.5 | % | 1.1 | % | 1.2 | % | ||||||
Economic incentive tax—City of Gary | 1.5 | % | 1.5 | % | 1.5 | % | ||||||
Depreciation and amortization(4) | 7.4 | % | 6.0 | % | 6.3 | % | ||||||
Amortization-debt pushed down from Majestic Holdco(5) | 0.0 | % | 0.0 | % | 0.0 | % | ||||||
Loss on investment in the BHR joint venture | 0.8 | % | 0.8 | % | 0.9 | % | ||||||
Loss (gain) on sale of assets | 0.0 | % | 0.0 | % | 0.0 | % | ||||||
Total operating costs and expenses | 75.9 | % | 75.5 | % | 76.3 | % | ||||||
Operating income | 9.3 | % | 11.2 | % | 11.2 | % | ||||||
Other Income (Expenses): | ||||||||||||
Interest income | 0.1 | % | 0.0 | % | 0.0 | % | ||||||
Interest expense | (9.9 | )% | (9.5 | )% | (11.1 | )% | ||||||
Interest expense—debt pushed down from Majestic Holdco(5) | (0.1 | )% | 0.0 | % | 0.0 | % | ||||||
Loss on bond redemption | (1.2 | )% | 0.0 | % | (11.4 | )% | ||||||
Other non-operating expense | 0.0 | % | (0.1 | )% | (0.1 | )% | ||||||
Total other expenses | (11.1 | )% | (9.6 | )% | (22.6 | )% | ||||||
Loss from continuing operations | (1.8 | )% | 1.6 | % | (11.4 | )% | ||||||
Loss from discontinued operations | 0.0 | % | 0.0 | % | (4.3 | )% | ||||||
Net (loss) income | (1.8 | )% | 1.6 | % | (15.7 | )% | ||||||
(1) | Gaming taxes include a $2.1 million (0.7% of gross revenue) retroactive gaming tax charge in the year ended December 31, 2003. |
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(2) | General and administrative expenses for the year ended December 31, 2004 include a $1.9 million (0.6% of gross revenue) retroactive property tax charge. | |
(3) | Corporate expenses for the year ended December 31, 2005 include a $2.3 million (0.7% of gross revenue) charge related to the mutual termination of the sale of Fitzgeralds Black Hawk. | |
(4) | On July 12, 2004, the Company entered into an agreement to sell substantially all of the assets subject to certain liabilities of Fitzgeralds Black Hawk. On April 14, 2005, Barden Colorado and Legends Gaming, LLC mutually agreed to terminate the transaction. The Company took a charge of approximately $1.5 million in the second quarter of 2005 for depreciation and amortization expense that was not recorded while Fitzgeralds Black Hawk was held for sale. The correspondingcatch-up depreciation and amortization in the year ended December 31, 2005 is $0.9 million (0.3% of gross revenue) for the period July 12, 2004 through December 31, 2004. Also included in depreciation and amortization expense is the pushdown of $20,000 of amortized financing costs associated with the Discount Notes. The amortized financing costs related to the discount notes are a negligible percentage of gross revenues. | |
(5) | Included in interest expense is the pushdown of $0.2 million of interest expense from the discount notes. The interest expense related to the Discount Notes is a negligible percentage of gross revenues. |
For the Twelve Months Ended | Percentage | |||||||||||||||||||
December 31, | Increase / (Decrease) | |||||||||||||||||||
2005 | 2004 | 2003 | 2005 v 2004 | 2004 v 2003 | ||||||||||||||||
(In millions) | ||||||||||||||||||||
Casino revenues | $ | 280.9 | $ | 274.8 | $ | 255.4 | 2.2 | % | 7.6 | % | ||||||||||
Room revenues | 7.7 | 7.7 | 7.9 | 0.7 | % | (3.3 | )% | |||||||||||||
Food and beverage revenues | 14.0 | 13.5 | 12.8 | 4.2 | % | 5.2 | % | |||||||||||||
Other revenues | 5.0 | 4.5 | 4.0 | 8.4 | % | 15.4 | % | |||||||||||||
Gross operating revenues | 307.6 | 300.5 | 280.1 | 2.4 | % | 7.3 | % | |||||||||||||
Less promotional allowances | 45.6 | 40.0 | 35.1 | 14.3 | % | 13.8 | % | |||||||||||||
Net operating revenues | 262.0 | 260.5 | 245.0 | 0.6 | % | 6.4 | % | |||||||||||||
Operating expenses | 233.3 | �� | 226.8 | 213.6 | 2.9 | % | 6.2 | % | ||||||||||||
Operating income | 28.7 | 33.7 | 31.4 | (14.9 | )% | 7.3 | % | |||||||||||||
Other (expense) income | (34.0 | ) | (28.7 | ) | (63.3 | ) | 18.4 | % | (54.6 | )% | ||||||||||
(Loss) income from continuing operations | (5.3 | ) | 5.0 | (31.9 | ) | (205.6 | )% | (115.7 | )% | |||||||||||
Loss from discontinued operation | — | — | (12.0 | ) | 0.0 | % | 100.0 | % | ||||||||||||
Net (loss) income | $ | (5.3 | ) | $ | 5.0 | $ | (43.9 | ) | (205.6 | )% | (111.4 | )% | ||||||||
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For the Twelve Months Ended | Percentage | |||||||||||||||||||
December 31, | Increase / (Decrease) | |||||||||||||||||||
2005 | 2004 | 2003 | 2005 v 2004 | 2004 v 2003 | ||||||||||||||||
(In millions) | ||||||||||||||||||||
Casino revenues | $ | 150.6 | $ | 149.6 | $ | 136.5 | 0.7 | % | 9.5 | % | ||||||||||
Room revenues | — | — | — | 0.0 | % | 0.0 | % | |||||||||||||
Food and beverage revenues | 1.8 | 1.8 | 1.5 | (3.1 | )% | 21.7 | % | |||||||||||||
Other revenues | 3.1 | 2.9 | 2.3 | 10.8 | % | 27.0 | % | |||||||||||||
Gross operating revenues | 155.5 | 154.3 | 140.3 | 0.8 | % | 9.9 | % | |||||||||||||
Less promotional allowances | 16.5 | 13.2 | 11.0 | 25.0 | % | 19.8 | % | |||||||||||||
Net operating revenues | 139.0 | 141.1 | 129.3 | (1.5 | )% | 9.1 | % | |||||||||||||
Operating expenses | 120.2 | 124.7 | 112.2 | (3.5 | )% | 11.1 | % | |||||||||||||
Operating income | 18.8 | 16.4 | 17.1 | 14.1 | % | (4.3 | )% | |||||||||||||
Other expense | (27.8 | ) | (26.8 | ) | (27.4 | ) | 3.4 | % | (2.0 | )% | ||||||||||
Net loss | $ | (9.0 | ) | $ | (10.4 | ) | $ | (10.3 | ) | (13.6 | )% | 1.8 | % | |||||||
For the Twelve Months Ended | Percentage | |||||||||||||||||||
December 31, | Increase / (Decrease) | |||||||||||||||||||
2005 | 2004 | 2003 | 2005 v 2004 | 2004 v 2003 | ||||||||||||||||
(In millions) | ||||||||||||||||||||
Casino revenues | $ | 4.6 | $ | — | $ | — | n/a | n/a | ||||||||||||
Room revenues | 0.1 | — | — | n/a | n/a | |||||||||||||||
Food and beverage revenues | 0.1 | — | — | n/a | n/a | |||||||||||||||
Other revenues | 0.1 | — | — | n/a | n/a | |||||||||||||||
Gross operating revenues | 4.9 | — | — | n/a | n/a | |||||||||||||||
Less promotional allowances | 0.3 | — | — | n/a | n/a | |||||||||||||||
Net operating revenues | 4.6 | — | — | n/a | n/a | |||||||||||||||
Operating expenses | 3.6 | — | — | n/a | n/a | |||||||||||||||
Operating income | 1.0 | — | — | n/a | n/a | |||||||||||||||
Other income (expense) | 0.0 | — | — | n/a | n/a | |||||||||||||||
Net income | $ | 1.0 | $ | — | $ | — | n/a | n/a | ||||||||||||
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For the Twelve Months Ended | Percentage | |||||||||||||||||||
December 31, | Increase / (Decrease) | |||||||||||||||||||
2005 | 2004 | 2003 | 2005 v 2004 | 2004 v 2003 | ||||||||||||||||
(In millions) | ||||||||||||||||||||
Casino revenues | $ | 87.6 | $ | 86.5 | $ | 84.3 | 1.2 | % | 2.6 | % | ||||||||||
Room revenues | 7.6 | 7.7 | 8.0 | (0.7 | )% | (3.3 | )% | |||||||||||||
Food and beverage revenues | 9.9 | 9.4 | 9.3 | 5.6 | % | 1.4 | % | |||||||||||||
Other revenues | 1.3 | 1.3 | 1.4 | 1.2 | % | (10.6 | )% | |||||||||||||
Gross operating revenues | 106.4 | 104.9 | 103.0 | 1.5 | % | 1.8 | % | |||||||||||||
Less promotional allowances | 23.5 | 21.7 | 19.4 | 8.4 | % | 12.1 | % | |||||||||||||
Net operating revenues | 82.9 | 83.2 | 83.6 | (0.3 | )% | (0.5 | )% | |||||||||||||
Operating expenses | 72.6 | 71.7 | 70.6 | 1.3 | % | 1.6 | % | |||||||||||||
Operating income | 10.3 | 11.5 | 13.0 | (10.6 | )% | (11.9 | )% | |||||||||||||
Other income (expense) | 0.0 | 0.0 | 0.0 | 250.3 | % | 9.5 | % | |||||||||||||
Net income | $ | 10.3 | $ | 11.5 | $ | 13.0 | (10.3 | )% | (11.9 | )% | ||||||||||
For the Twelve Months Ended | Percentage | |||||||||||||||||||
December 31, | Increase / (Decrease) | |||||||||||||||||||
2005 | 2004 | 2003 | 2005 v 2004 | 2004 v 2003 | ||||||||||||||||
(In millions) | ||||||||||||||||||||
Casino revenues | $ | 38.1 | $ | 38.7 | $ | 34.5 | (1.4 | )% | 12.3 | % | ||||||||||
Room revenues | — | — | — | 0.0 | % | 0.0 | % | |||||||||||||
Food and beverage revenues | 2.2 | 2.2 | 2.0 | (0.2 | )% | 10.2 | % | |||||||||||||
Other revenues | 0.4 | 0.4 | 0.3 | (1.4 | )% | 54.7 | % | |||||||||||||
Gross operating revenues | 40.7 | 41.3 | 36.8 | (1.4 | )% | 12.5 | % | |||||||||||||
Less promotional allowances | 5.3 | 5.1 | 4.8 | 5.2 | % | 6.6 | % | |||||||||||||
Net operating revenues | 35.4 | 36.2 | 32.0 | (2.3 | )% | 13.3 | % | |||||||||||||
Operating expenses | 28.0 | 26.2 | 24.9 | 6.7 | % | 5.7 | % | |||||||||||||
Operating income | 7.4 | 10.0 | 7.1 | (25.9 | )% | 39.8 | % | |||||||||||||
Other income (expense) | (0.0 | ) | (0.0 | ) | — | (97.2 | )% | 0.0 | % | |||||||||||
Net income | $ | 7.4 | $ | 10.0 | $ | 7.1 | (25.7 | )% | 39.5 | % | ||||||||||
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For the Twelve Months Ended | Percentage | |||||||||||||||||||
December 31, | Increase / (Decrease) | |||||||||||||||||||
2005 | 2004 | 2003 | 2005 v 2004 | 2004 v 2003 | ||||||||||||||||
(In millions) | ||||||||||||||||||||
Casino revenues | $ | — | $ | — | $ | — | 0.0 | % | 0.0 | % | ||||||||||
Room revenues | — | — | — | 0.0 | % | 0.0 | % | |||||||||||||
Food and beverage revenues | — | — | — | 0.0 | % | 0.0 | % | |||||||||||||
Other revenues | — | — | — | 0.0 | % | 0.0 | % | |||||||||||||
Gross operating revenues | — | — | — | 0.0 | % | 0.0 | % | |||||||||||||
Less promotional allowances | — | — | — | 0.0 | % | 0.0 | % | |||||||||||||
Net operating revenues | — | — | — | 0.0 | % | 0.0 | % | |||||||||||||
Operating expenses | 0.3 | 0.7 | 2.4 | (58.1 | )% | (71.1 | )% | |||||||||||||
Operating income | (0.3 | ) | (0.7 | ) | (2.4 | ) | (58.1 | )% | (71.1 | )% | ||||||||||
Other income (expense) | (3.4 | ) | (1.9 | ) | (35.9 | ) | 80.6 | % | (94.7 | )% | ||||||||||
Loss from continuing operations | (3.7 | ) | (2.6 | ) | (38.3 | ) | 43.6 | % | (93.3 | )% | ||||||||||
(Loss) from discontinued operation | — | — | (10.0 | ) | 0.0 | % | (100.0 | )% | ||||||||||||
Net (loss) | $ | (3.7 | ) | $ | (2.6 | ) | $ | (48.3 | ) | 43.6 | % | (94.7 | )% | |||||||
For the Years | ||||||||||||
Ended | ||||||||||||
December 31, | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
Casino revenues | 48.9 | % | 49.8 | % | 48.8 | % | ||||||
Room revenues | 0.0 | % | 0.0 | % | 0.0 | % | ||||||
Food and beverage revenues | 0.6 | % | 0.5 | % | 0.5 | % | ||||||
Other revenues | 1.1 | % | 1.0 | % | 0.8 | % | ||||||
Gross operating revenues | 50.6 | % | 51.3 | % | 50.1 | % | ||||||
Less promotional allowances | 5.4 | % | 4.4 | % | 3.9 | % | ||||||
Net operating revenues | 45.2 | % | 46.9 | % | 46.2 | % | ||||||
Operating expenses | 39.1 | % | 41.4 | % | 40.1 | % | ||||||
Operating income | 6.1 | % | 5.5 | % | 6.1 | % | ||||||
Other income (expense) | (9.0 | )% | (8.9 | )% | (9.8 | )% | ||||||
Net loss | (2.9 | )% | (3.4 | )% | (3.7 | )% | ||||||
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For the Twelve Months Ended | ||||||||||||
December 31, | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
Casino revenues | 1.5 | % | 0.0 | % | 0.0 | % | ||||||
Room revenues | 0.0 | % | 0.0 | % | 0.0 | % | ||||||
Food and beverage revenues | 0.1 | % | 0.0 | % | 0.0 | % | ||||||
Other revenues | 0.0 | % | 0.0 | % | 0.0 | % | ||||||
Gross operating revenues | 1.6 | % | 0.0 | % | 0.0 | % | ||||||
Less promotional allowances | 0.1 | % | 0.0 | % | 0.0 | % | ||||||
Net operating revenues | 1.5 | % | 0.0 | % | 0.0 | % | ||||||
Operating expenses | 1.2 | % | 0.0 | % | 0.0 | % | ||||||
Operating income | 0.3 | % | 0.0 | % | 0.0 | % | ||||||
Other income (expense) | 0.0 | % | 0.0 | % | 0.0 | % | ||||||
Net income | 0.3 | % | 0.0 | % | 0.0 | % | ||||||
For the Twelve Months Ended | ||||||||||||
December 31, | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
Casino revenues | 28.5 | % | 28.8 | % | 30.1 | % | ||||||
Room revenues | 2.5 | % | 2.6 | % | 2.9 | % | ||||||
Food and beverage revenues | 3.2 | % | 3.1 | % | 3.3 | % | ||||||
Other revenues | 0.4 | % | 0.4 | % | 0.5 | % | ||||||
Gross operating revenues | 34.6 | % | 34.9 | % | 36.8 | % | ||||||
Less promotional allowances | 7.6 | % | 7.2 | % | 6.9 | % | ||||||
Net operating revenues | 27.0 | % | 27.7 | % | 29.9 | % | ||||||
Operating expenses | 23.7 | % | 23.9 | % | 25.2 | % | ||||||
Operating income | 3.3 | % | 3.8 | % | 4.7 | % | ||||||
Other income (expense) | 0.0 | % | 0.0 | % | 0.0 | % | ||||||
Net income | 3.3 | % | 3.8 | % | 4.7 | % | ||||||
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For the Twelve Months Ended | ||||||||||||
December 31, | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
Casino revenues | 12.4 | % | 12.9 | % | 12.3 | % | ||||||
Room revenues | 0.0 | % | 0.0 | % | 0.0 | % | ||||||
Food and beverage revenues | 0.7 | % | 0.7 | % | 0.7 | % | ||||||
Other revenues | 0.1 | % | 0.2 | % | 0.1 | % | ||||||
Gross operating revenues | 13.2 | % | 13.8 | % | 13.1 | % | ||||||
Less promotional allowances | 1.7 | % | 1.7 | % | 1.7 | % | ||||||
Net operating revenues | 11.5 | % | 12.1 | % | 11.4 | % | ||||||
Operating expenses | 9.1 | % | 8.8 | % | 8.9 | % | ||||||
Operating income | 2.4 | % | 3.3 | % | 2.5 | % | ||||||
Other income (expense) | 0.0 | % | 0.0 | % | 0.0 | % | ||||||
Net income | 2.4 | % | 3.3 | % | 2.5 | % | ||||||
For the Twelve Months Ended | ||||||||||||
December 31, | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
Casino revenues | 0.0 | % | 0.0 | % | 0.0 | % | ||||||
Room revenues | 0.0 | % | 0.0 | % | 0.0 | % | ||||||
Food and beverage revenues | 0.0 | % | 0.0 | % | 0.0 | % | ||||||
Other revenues | 0.0 | % | 0.0 | % | 0.0 | % | ||||||
Gross operating revenues | 0.0 | % | 0.0 | % | 0.0 | % | ||||||
Less promotional allowances | 0.0 | % | 0.0 | % | 0.0 | % | ||||||
Net operating revenues | 0.0 | % | 0.0 | % | 0.0 | % | ||||||
Operating expenses | 0.0 | % | 0.2 | % | 0.9 | % | ||||||
Operating loss | 0.0 | % | (0.2 | )% | (0.9 | )% | ||||||
Other expenses | (1.2 | )% | (0.7 | )% | (12.8 | )% | ||||||
Loss from continuing operations | (1.2 | )% | (0.9 | )% | (13.7 | )% | ||||||
Income (loss) from discontinued operation | 0.0 | % | 0.0 | % | (3.6 | )% | ||||||
Net loss | (1.2 | )% | (0.9 | )% | (17.3 | )% | ||||||
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• | Financial Accounting Standards No. 151, “Inventory Costs—an amendment of ARB No. 43, Chapter 4” (“SFAS 151”). SFAS 151 amends ARB No. 43, Chapter 4, “Inventory Pricing,” to clarify the accounting for abnormal amounts of idle facility expense, freight, handling costs, and wasted material (spoilage). SFAS 151 is effective for financial statements for fiscal years beginning after June 15, 2005. The Company adopted SFAS 151 without any material impact on the Company’s financial position, results of operations or cash flows. | |
• | Financial Accounting Standards No. 154, “Accounting Changes and Error Corrections—a replacement of APB No. 20 and FASB Statement No. 3” (“SFAS 154”). SFAS 154 replaces APB No. 20, “Accounting Changes” and FASB Statement No. 3, “Reporting Accounting Changes in Interim Financial Statement” and |
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changes the requirements for the accounting for and reporting of a change in accounting principle. SFAS 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. The Company adopted SFAS 154 without any material impact on the Company’s financial position, results of operations or cash flows. |
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Payments Due by Year Ended(4) | ||||||||||||||||||||||||||||
Contractual Obligations | 2006 | 2007 | 2008 | 2009 | 2010 | Thereafter | Total | |||||||||||||||||||||
Long-Term Debt | $ | — | $ | — | $ | — | $ | — | $ | 300,000,000 | $ | 200,000,000 | $ | 500,000,000 | ||||||||||||||
Credit Facility | — | — | — | — | 47,212,346 | — | 47,212,346 | |||||||||||||||||||||
Capital leases | 174,447 | 139,852 | 48,272 | 2,713 | — | — | 365,284 | |||||||||||||||||||||
Development agreement(1) | 6,000,000 | 6,000,000 | 6,000,000 | 6,000,000 | 6,000,000 | — | 30,000,000 | |||||||||||||||||||||
Operating Leases(2) | 1,133,489 | 523,718 | 212,784 | 181,832 | 91,892 | 45,367 | 2,189,082 | |||||||||||||||||||||
Interest on | ||||||||||||||||||||||||||||
Long-Term Debt | 44,453,874 | 48,006,338 | 48,001,052 | 48,000,000 | 48,000,000 | 4,875,000 | 241,336,264 | |||||||||||||||||||||
Credit Facility(3) | 3,602,671 | 3,602,671 | 3,602,671 | 3,602,671 | 1,050,779 | — | 15,461,463 | |||||||||||||||||||||
Total | $ | 55,364,481 | $ | 58,272,579 | $ | 57,864,779 | $ | 57,787,216 | $ | 402,355,017 | $ | 204,920,367 | $ | 836,564,439 | ||||||||||||||
(1) | On March 26, 1996, the City of Gary (“City”) and Majestic Star entered into a development agreement (the “Majestic Development Agreement”), which requires Majestic Star to pay the City an economic incentive equal to 3% of Majestic Star’s adjusted gross receipts, as defined by the Indiana Riverboat Gambling Act. For the period January 1, 2005 through December 20, 2005, and the twelve month periods ended December 31, 2004 and 2003, Majestic Star paid the City of Gary $4.4 million, $4.5 million and $4.1 million, respectively. Because this is a continuing obligation for the Company, we cannot estimate an amount to include in the Thereafter and Total columns. | |
(2) | Years 2006 through 2010 includes $15,936 each year relating to a perpetual lease. Because this is a continuing obligation for the Company, we cannot estimate an amount to include in the Thereafter and Total columns. | |
(3) | Variable rate of 7.631% calculated as a weighted average of rates on the senior secured credit facility indebtedness using LIBOR in effect plus 2.75% as of December 31, 2005. | |
(4) | Excludes any amounts related to the debt of Majestic Holdco. Such debt of our parent company has been pushed down to us. See Note 12 to our consolidated financial statements. |
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Liabilities | 2006 | 2007 | 2008 | 2009 | 2010 | Thereafter | Total | Fair Value(1) | ||||||||||||||||||||||||
(Amounts in thousands) | ||||||||||||||||||||||||||||||||
Fixed Rate Debt Maturities(2)(3) | 1,159.0 | 139.9 | 48.3 | 2.7 | 300,000.0 | 263,500.0 | 564,849.9 | 564,767.4 | ||||||||||||||||||||||||
Average interest rate | 9.83 | % | 9.88 | % | 9.91 | % | 9.93 | % | 9.98 | % | 12.17 | % | 9.95 | % | ||||||||||||||||||
Variable Rate(2) | — | — | — | — | 47,212.3 | — | 47,212.3 | 47,212.3 | ||||||||||||||||||||||||
Average interest rate | 7.63 | % | 7.63 | % | 7.63 | % | 7.63 | % | 7.63 | % | — | 7.63 | % | 7.63 | % |
(1) | The fair values for debt with no public market are based on the borrowing rates currently available for debt instruments with similar terms and maturities, and for publicly traded debts, the fair values are based on market quotes. | |
(2) | Based on contractual interest rates for fixed rate indebtedness or current LIBOR rates for variable rate indebtedness. | |
(3) | Our fixed-rate debt maturities includes the discount notes issued by Majestic Holdco. The discount notes are solely the obligation of Majestic Holdco and are unsecured. Neither the Company nor any of its subsidiaries guarantees the discount notes nor are the equity or assets of the Company or its subsidiaries security for the discount notes. Further, the indentures governing the senior notes and the senior secured notes and the loan and security agreement which govern our senior secured credit facility preclude distributions by the Company to Majestic Holdco unless certain financial tests are met. The discount notes are included in the above table as required by SEC Staff Accounting Bulletin Topic 5(J). |
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• | Majestic Star is a riverboat casino located at Buffington Harbor in Gary, Indiana, approximately 23 miles southeast of downtown Chicago. The riverboat casino is a four-story, 360-foot long vessel with a contemporary design that accommodates approximately 3,000 passengers plus crew. The casino includes approximately 40,800 square feet of gaming space across three expansive decks. The casino vessel provides live entertainment, a sports bar, a VIP lounge, and a private high-limit table games area. Majestic Star is located adjacent to the 2,000-space covered parking garage (300 spaces of which are valet) at the Buffington Harbor gaming complex. | |
• | Majestic Star II (formerly Trump Indiana) also operates from the Buffington Harbor gaming complex. The riverboat casino is a four-story, 280-foot long vessel, which accommodates approximately 2,740 passengers plus crew. The casino vessel includes approximately 43,000 square feet of gaming space that provides live entertainment, a high limit gaming area, and a poker room, which is the largest in the Chicagoland market. Majestic Star II owns and operates a 300-room hotel and various restaurants. It is also located adjacent to the 2,000-space covered parking garage at the Buffington Harbor gaming complex. | |
• | The Buffington Harbor gaming complex is a two-level, 85,410 square foot structure containing Passports World Class Buffet, Koko Taylor’s Blues Cafe and three additional food and beverage outlets: Miller Pizza, Harbor Treats and Jackpot Java. At this time, Buffington Harbor leases the rights to operate these restaurants to third parties and does not operate any of the food and beverage facilities located on its premises. The Buffington Harbor gaming complex is adjacent to an outdoor festival area. The Buffington Harbor gaming complex also contains a gift shop, banquet and entertainment facilities, a VIP lounge, a 2,000-space covered parking structure and 2,600 surface parking spaces. The complex offers valet parking and convenient bus loading and unloading facilities. | |
• | Fitzgeralds Tunica is located in north Tunica County, Mississippi, approximately 30 miles from downtown Memphis, Tennessee. Fitzgeralds Tunica has an Irish castle theme and is the focal point of a50-acre site situated adjacent to the Mississippi River. Fitzgeralds Tunica is a full-service entertainment destination whose customer base has increased and become more diversified by its ability to attract, in addition to local |
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customers, independent travelers,tour-and-travel customers and guests for special events and conventions. Fitzgeralds Tunica includes 38,088 square feet of gaming space, a 507-room hotel (including 72 suites), an indoor special events center, an indoor swimming pool, two bars, three restaurants and a gift shop. |
• | Fitzgeralds Black Hawk is located adjacent to the entrance to the downtown gaming area of Black Hawk, Colorado. Fitzgeralds Black Hawk is approximately 30 miles from Denver. The 10,253 square foot casino also offers a restaurant and a bar. Fitzgeralds Black Hawk also has a 392-space, all valet parking garage adjacent to the casino. |
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Name | Age | Position(s) | ||||
Don H. Barden | 62 | Chairman, President and Chief Executive Officer | ||||
Kirk Saylor | 49 | Executive Vice President and Chief Operating Officer | ||||
Jon S. Bennett | 45 | Vice President and Chief Financial Officer | ||||
Steven J. Lemberg | 51 | Director, Executive Vice President of Strategic Initiatives | ||||
Patrick R. Cruzen | 59 | Director | ||||
Michelle R. Sherman | 40 | Director | ||||
Andrew J. Warhola | 80 | Director |
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Annual Compensation | All Other | |||||||||||||||
Name and Position | Year | Salary | Bonus | Compensation | ||||||||||||
Don H. Barden(1) | 2005 | $ | 605,035 | $ | — | $ | 184,721 | |||||||||
Chairman, President and | 2004 | 425,000 | — | 176,426 | ||||||||||||
Chief Executive Officer | 2003 | 390,096 | — | 169,742 | ||||||||||||
Jon S. Bennett(2) | 2005 | $ | 279,355 | $ | 200,000 | $ | 11,390 | |||||||||
Vice President and | 2004 | 250,017 | 50,000 | 41,784 | ||||||||||||
Chief Financial Officer | 2003 | 256,731 | 25,000 | 68,164 | ||||||||||||
Steven Lemberg(3) | 2005 | $ | 294,277 | $ | 120,000 | $ | 5,429 | |||||||||
Executive Vice President of | ||||||||||||||||
Strategic Initiatives |
(1) | For the years 2005, 2004 and 2003, the amounts reflected in “All Other Compensation” for Mr. Barden represent life insurance premiums paid by the Company of $127,160, $129,368 and $123,435, respectively, an auto allowance of $42,117, $47,058 and $46,307, respectively and in 2005 only, group term life insurance of $15,444. | |
(2) | For the year 2005, the amounts shown in “All Other Compensation” reflect a 401(k) match of $4,500 for which Mr. Bennett is fully vested, reimbursement for un-reimbursed medical plan expenditures of $5,000 and group term life insurance of $1,890. For the year 2004, the amounts shown in “All Other Compensation” reflect $36,090 of taxable relocation and housing allowance costs, a 401(k) match of $4,500 for which Mr. Bennett is fully vested, $1,140 of group-term life insurance premiums paid by the Company on Mr. Bennett’s behalf and reimbursement for un-reimbursed medical plan expenditures of $54. For the year 2003, Mr. Bennett’s salary includes the payment of $6,731 of unused vacation relating to 2002 while Mr. Bennett was the Vice President of Finance and Administration at Barden Mississippi. For the year 2003, the amounts shown in “All Other Compensation” reflect $58,569 of taxable relocation and housing allowance costs, reimbursement of $5,000 for un-reimbursed medical plan expenditures, a 401(k) match of $4,500 for which Mr. Bennett is fully vested and $95 of group-term life insurance. Bonuses reflected in the Executive Compensation Schedule are for the years earned, not paid. | |
(3) | For the year 2005, the amounts shown in “All Other Compensation” reflect reimbursement for un-reimbursed medical plan expenditures of $2,255 and group term life insurance of $3,174. Mr. Lemberg joined the Company as its Executive Vice President of Strategic Initiatives on January 3, 2005, and as a result, Mr. Lemberg had no compensation for 2004 or 2003. Bonuses reflected in the Executive Compensation Schedule are for the year earned, not paid. |
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COMPENSATION COMMITTEE: | ANDREW J. WARHOLA |
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AND THE EXISTING SENIOR SECURED NOTES
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• | cause the registration statement with respect to the exchange offers to become effective under the Securities Act by September 17, 2006; and | |
• | complete the exchange offers no later than 30 days after the SEC declares the registration statement with respect to the exchange offers effective. |
• | are not our “affiliate,” as defined under Rule 405 under the Securities Act; | |
• | are acquiring the registered senior secured notes or registered senior notes, as applicable, in the ordinary course of your business; | |
• | are not engaging in, and do not intend to engage in, a distribution, within the meaning of the Securities Act, of the registered senior secured notes or registered senior notes; | |
• | do not have an arrangement or understanding with any person to participate in a distribution of the registered senior secured notes or registered senior notes; and | |
• | are not a broker-dealer who acquired unregistered senior secured notes or unregistered senior notes from us to resell them under Rule 144A of the Securities Act or any other exemption available under the Securities Act. |
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• | you will not be able to rely on the interpretations of the staff of the SEC in connection with resale or other transfer of registered senior secured notes or registered senior notes; and | |
• | you must comply with the registration and prospectus delivery requirements of the Securities Act, or have an exemption from such requirements available to you, in connection with the sale, resale or other transfer of the registered senior secured notes or registered senior notes. |
• | Upon the terms and subject to the conditions set forth in this prospectus and in the letter of transmittal, we will accept any and all unregistered senior secured notes and unregistered senior notes that are validly tendered on or prior to 5:00 p.m., New York City time, on the expiration date. When we refer to the expiration date, we mean 5:00 pm, New York City time, on , 2006. |
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• | You should read “—Expiration Date; Extensions; Amendments” below for an explanation of how the expiration date may be amended. | |
• | We will issue $1,000 principal amount of registered senior secured notes or registered senior notes, as applicable, in exchange for each $1,000 principal amount of outstanding unregistered senior secured notes or unregistered senior notes accepted in the exchange offers, respectively. | |
• | You may exchange some or all of your unregistered senior secured notes or unregistered senior notes pursuant to the exchange offers. However, unregistered senior secured notes or unregistered senior notes may be exchanged only in integral multiples of $1,000 of principal amount. | |
• | The form and terms of the registered senior secured notes and registered senior notes are identical in all material respects to the form and terms of the unregistered senior secured notes or unregistered senior notes, respectively, except for the elimination of some transfer restrictions, registration rights and liquidated damages provisions relating to the unregistered senior secured notes and unregistered senior notes. The registered senior secured notes and registered senior notes will evidence the same debt as the unregistered senior secured notes and unregistered senior notes, as applicable, and will be issued pursuant to, and entitled to the benefits of, the respective indentures pursuant to which the unregistered senior secured notes and unregistered senior notes were issued. | |
• | As of the date of this prospectus, unregistered senior secured notes representing $40.0 million in aggregate principal amount and unregistered senior notes representing $200.0 million were outstanding and there was one registered holder of each, a nominee of the Depository Trust Company. This prospectus, together with the letter of transmittal, is being sent to that registered holder and to others believed to have beneficial interests in the unregistered senior secured notes and the unregistered senior notes. | |
• | We will be deemed to have accepted validly tendered unregistered senior secured notes and unregistered senior notes when, as, and if we have given oral notice (promptly confirmed in writing) or written notice thereof to the exchange agent. The exchange agent will act as agent for the tendering holders for the purpose of receiving the registered senior secured notes and registered senior notes from us. If any tendered unregistered senior secured notes or tendered unregistered senior notes are not accepted for exchange because of an invalid tender, the occurrence of other events set forth under the heading “—Conditions to the Exchange Offers” or otherwise, certificates for any of these unaccepted unregistered senior secured notes or unregistered senior notes will be returned, without expense, to the tendering holder of those unregistered senior secured notes or unregistered senior notes as soon as practicable after the expiration date, unless the exchange offers are extended. In the case of unregistered senior secured notes or unregistered senior notes tendered by book-entry transfer into the exchange agent’s account at the Depository Trust Company (“DTC”) pursuant to the book-entry transfer procedures described below, these unregistered senior secured notes or unregistered senior notes will be credited to an account maintained with DTC, as soon as practicable after the expiration date. | |
• | We are not conditioning the exchange offers upon the tender of any minimum aggregate principal amount of unregistered senior secured notes or unregistered senior notes. | |
• | The exchange offers are subject to the condition that the exchange offers not violate applicable law or applicable interpretations of the staff of the SEC. See “—Conditions to the Exchange Offers.” | |
• | We may accept tendered unregistered senior secured notes or tendered unregistered senior notes by giving oral or written notice to the exchange agent. We must promptly confirm oral notice in writing. The exchange agent will act as your agent for the purpose of receiving the registered senior secured notes or registered senior notes from us and delivering them to you. | |
• | You will not be required to pay brokerage commissions or fees or, subject to the instructions in the letter of transmittal, transfer taxes with respect to the exchange of unregistered senior secured notes or unregistered senior notes. We will pay all charges and expenses applicable to the exchange offers, other than taxes specified under “—Transfer Taxes.” See “—Fees and Expenses.” |
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• | amend the terms of the exchange offers in any manner; | |
• | delay acceptance of any unregistered senior secured notes or unregistered senior notes, or terminate the exchange offer and refuse to accept any unregistered senior secured notes or unregistered senior notes not previously accepted, if any of the condition described under “—Conditions to the Exchange Offers” shall have occurred and shall not have been waived by us; | |
• | extend the expiration date of the exchange offers; | |
• | purchase or make offers for any unregistered senior secured notes or unregistered senior notes that remain outstanding after the expiration date; or | |
• | to the extent permitted by applicable law, purchase unregistered senior secured notes or unregistered senior notes in the open market, in privately negotiated transactions, or otherwise. |
• | the exchange agent must receive certificates for the unregistered senior secured notes or unregistered senior notes along with the letter of transmittal prior to the expiration date; |
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• | the exchange agent must receive prior to the expiration date a timely confirmation of a book-entry transfer of the unregistered senior secured notes or unregistered senior notes, if that procedure is available, into the exchange agent’s account at DTC following the procedure for book-entry transfer described below, along with the letter of transmittal or an agent’s message in place of the letter of transmittal; or | |
• | you must comply with the guaranteed delivery procedures described below. |
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• | the registered senior secured notes or registered senior notes to be received by you will be acquired in the ordinary course of your business; | |
• | you have no arrangement or understanding with any person to participate in a distribution of the registered senior secured notes or registered senior notes within the meaning of the Securities Act; | |
• | if you are not a broker-dealer, you are not engaged in, and do not intend to engage in, the distribution of the registered senior secured notes or registered senior notes; | |
• | you are not an “affiliate” of ours, as defined under Rule 405 of the Securities Act; and | |
• | you acknowledge and agree that any person who is a broker-dealer or is participating in the exchange offers for the purpose of distributing the registered senior secured notes or registered senior notes must comply with the registration and prospectus delivery requirements of the Securities Act. |
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• | by the registered holder of the unregistered senior secured notes or unregistered senior notes who has not completed the box entitled “Special Issuance Instructions” or “Special Delivery Instructions” in the letter of transmittal; or | |
• | for the account of an eligible institution, as defined below. |
• | the aggregate principal amount of unregistered senior secured notes or unregistered senior notes that have been tendered by such participant; | |
• | that the participant has received the letter of transmittal and agrees to be bound by its terms; and | |
• | that we may enforce the letter of transmittal against the participant. |
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• | your unregistered senior secured notes or unregistered senior notes are not immediately available; | |
• | you are unable to deliver on time your unregistered senior secured notes or unregistered senior notes, the letter of transmittal or any other document that you are required to deliver to the exchange agent; or | |
• | you cannot complete the procedures for delivery by book-entry transfer on time; |
• | you make the tender through an eligible institution; | |
• | prior to the expiration date, the exchange agent receives from that eligible institution a notice of guaranteed delivery, substantially in the form provided by the exchange agent, by facsimile transmission, mail or hand delivery, setting forth your name and address and the amount of unregistered senior secured notes or unregistered senior notes tendered, stating that the tender is being made by guaranteed delivery and guaranteeing that within three New York Stock Exchange trading days after the date of execution of the notice of guaranteed delivery, the certificates for all physically tendered unregistered senior secured notes or unregistered senior notes, in proper form for transfer, or a book-entry confirmation, as the case may be, together with a properly completed and duly executed letter of transmittal—or an agent’s message in lieu thereof—with any required signature guarantees will be deposited by the eligible institution with the exchange agent; and | |
• | the exchange agent receives the certificates for all physically tendered unregistered senior secured notes or unregistered senior notes, in proper form for transfer, or confirmation of a book-entry transfer, as the case may be, within three New York Stock Exchange trading days after the date of execution of the notice of guaranteed delivery. |
• | specify the name of the person having tendered the unregistered senior secured notes or unregistered senior notes to be withdrawn; | |
• | identify the unregistered senior secured notes or unregistered senior notes to be withdrawn, including the certificate number or numbers and principal amount of the unregistered senior secured notes or unregistered senior notes; | |
• | be signed by the holder in the same manner as the original signature on the letter of transmittal by which the unregistered senior secured notes or unregistered senior notes were tendered, including any required signature guarantees; and | |
• | specify the name in which these unregistered senior secured notes or unregistered senior notes are registered, if different from that of the person having tendered the unregistered senior secured notes or unregistered senior notes to be withdrawn. |
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• | file a registration statement with the SEC relating to the exchange offers under the Securities Act no later than May 20, 2006; | |
• | use our reasonable best efforts to cause the exchange offers registration statement to be declared effective under the Securities Act on or before September 17, 2006; | |
• | keep the exchange offers open for acceptance for at least 30 days after notice of the exchange offers is mailed to holders of the unregistered senior secured notes and unregistered senior notes; | |
• | use our reasonable best efforts to keep the exchange offers registration statement effective until consummation of the exchange offers pursuant to their terms; | |
• | commence and use our reasonable best efforts to consummate the exchange offers not later than 30 days following the date of effectiveness of the exchange offers registration statement; | |
• | promptly after the close of the exchange offers, accept for exchange all unregistered senior secured notes and unregistered senior notes validly tendered for exchange prior to the expiration of the exchange offers; | |
• | promptly after the close of the exchange offers, deliver all validly tendered unregistered senior secured notes and unregistered senior notes to The Bank of New York Trust Company, N.A., as trustee, and cause the trustee to promptly deliver registered senior secured notes or registered senior notes to each holder equal in aggregate principal amount to the unregistered senior secured notes or unregistered senior notes, as applicable, tendered for exchange by such holder. |
• | we or the holders of a majority in aggregate principal amount of the unregistered senior secured notes or unregistered senior notes determine, in our or their reasonable judgment, that they will not receive registered senior secured notes or registered senior notes that would be tradable without restriction under the Securities Act and the Exchange Act and without material restrictions under applicable blue sky or state securities laws; | |
• | we are not permitted to effect the exchange offers under applicable law or applicable interpretations of law by the SEC staff prior to December 21, 2005; | |
• | for any reason, the exchange offers are not consummated within 210 days after we issued the unregistered senior secured notes or unregistered senior notes; | |
• | within 20 business days of the consummation of the exchange offers, any holder of unregistered senior secured notes or unregistered senior notes notifies us that it: |
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• | we fail to file any of the registration statements required by the registration rights agreements on or prior to the date specified for such filing; | |
• | any of such registration statements is not declared effective by the SEC on or prior to the date specified for such effectiveness; | |
• | we have not exchanged registered senior secured notes and registered senior notes for all validly tendered unregistered senior secured notes or registered senior notes, as applicable, within 30 days after the exchange offers are declared effective by the SEC; or | |
• | the exchange offers registration statement or the shelf registration statement is declared effective by the SEC, but thereafter, shall either be withdrawn by us or shall become subject to an effective stop order suspending the effectiveness of such registration statement, and we fail to file and have declared effective within 30 days an additional registration statement. |
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By Mail, Hand or Overnight Delivery: | The Bank of New York | |
Corporate Trust Operations | ||
Reorganization Unit | ||
101 Barclay Street - 7 East | ||
New York, NY 10286 | ||
Attn: Mr. David Mauer | ||
By Facsimile for Eligible Institutions: | (212) 298-1915 | |
For Information: | (212) 815-3687 |
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• | registered senior secured notes or registered senior notes for principal amounts not tendered, or accepted for exchange are to be registered or issued in the name of any person other than the registered holder of the unregistered senior secured notes or unregistered senior notes tendered; or | |
• | tendered unregistered senior secured notes or unregistered senior notes are registered in the name of any person other than the person signing the letter of transmittal. |
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Year | Percentage | |||
2007 | 104.750% | |||
2008 | 102.375% | |||
2009 and thereafter | 100.000% |
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• | accept for payment the Senior Secured Notes or portions of Senior Secured Notes tendered pursuant to the Change of Control offer; | |
• | deposit with the paying agent an amount equal to the Change of Control payment in respect of all Senior Secured Notes or portions of Senior Secured Notes so tendered and not withdrawn; and | |
• | deliver or cause to be delivered to the Senior Secured Notes Trustee the Senior Secured Notes so accepted, together with an Officers’ Certificate stating that the Senior Secured Notes or portions of Senior Secured Notes tendered to us are accepted for payment. |
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• | execute and deliver to the Senior Secured Notes Trustee a supplemental Senior Secured Notes Indenture in form reasonably satisfactory to the Senior Secured Notes Trustee, pursuant to which such Restricted Subsidiary shall unconditionally guarantee all of the Senior Secured Notes Issuers’ Obligations under the Notes and the Senior Secured Notes Indenture on the terms set forth in such Indenture; and | |
• | deliver to the Senior Secured Notes Trustee an opinion of counsel that such supplemental Senior Secured Notes Indenture has been duly authorized, executed and delivered by such Restricted Subsidiary and that the Senior Secured Notes Indenture constitutes a legal, valid, binding and enforceable obligation, of such Restricted Subsidiary, in each case subject to customary qualifications. |
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• | the rights of Holders of outstanding Senior Secured Notes to receive payments in respect of the principal of, premium, if any, and interest on such Senior Secured Notes and Liquidated Damages, if any, when such payments are due from the trust referred to below; | |
• | our obligations concerning issuing temporary Senior Secured Notes, registration of Senior Secured Notes, mutilated, destroyed, lost or stolen Senior Secured Notes and the maintenance of an office or agency for payment and money for security payments held in trust; | |
• | the rights, powers, trusts, duties and immunities of the Senior Secured Notes Trustee, and our and the Subsidiary Guarantors’ obligations in connection therewith; and | |
• | the Legal Defeasance provisions of the Senior Secured Notes Indenture. |
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• | cure any ambiguity, defect or inconsistency; | |
• | provide for uncertificated Senior Secured Notes in addition to or in place of certificated Senior Secured Notes; | |
• | provide for the assumption of our or the Subsidiary Guarantors’ obligations to Holders in the case of a merger or consolidation; | |
• | make any change that would provide any additional rights or benefits to the Holders or that does not adversely affect the legal rights of any such Holder under the Senior Secured Notes Indenture or the Senior Secured Notes; | |
• | release any Subsidiary Guarantee permitted to be released under the terms of the Senior Secured Notes Indenture; | |
• | comply with requirements of the SEC in order to effect or maintain the qualification of the Senior Secured Notes Indenture under the Trust Indenture Act; or |
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• | comply with the requirements of the Senior Secured Notes Trustee and the Depositary (including its nominees) with respect to transfers of beneficial interests in the Senior Secured Notes. |
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Name: | Fitzgeralds Tunica | |
Official Number: | 262757 | |
Type: | Barge |
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Year | Percentage | |||
2008 | 104.875% | |||
2009 | 102.438% | |||
2010 and thereafter | 100.000% |
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• | accept for payment the Senior Notes or portions of Senior Notes tendered pursuant to the Change of Control offer; | |
• | deposit with the paying agent an amount equal to the Change of Control payment in respect of all Senior Notes or portions of Senior Notes so tendered and not withdrawn; and | |
• | deliver or cause to be delivered to the Senior Notes Trustee the Senior Notes so accepted, together with an Officers’ Certificate stating that the Senior Notes or portions of Senior Notes tendered to us are accepted for payment. |
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• | execute and deliver to the Senior Notes Trustee a supplemental Senior Notes Indenture in form reasonably satisfactory to the Senior Notes Trustee, pursuant to which such Restricted Subsidiary shall unconditionally guarantee all of the Senior Notes Issuers’ Obligations under the Senior Notes and the Senior Notes Indenture on the terms set forth in the Senior Notes Indenture; and | |
• | deliver to the Senior Notes Trustee an opinion of counsel that such supplemental Senior Notes Indenture has been duly authorized, executed and delivered by such Restricted Subsidiary and that the Senior Notes Indenture constitutes a legal, valid, binding and enforceable obligation, of such Restricted Subsidiary, in each case subject to customary qualifications. |
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• | the rights of Holders of outstanding Senior Notes to receive payments in respect of the principal of, premium, if any, and interest on such Senior Notes and Liquidated Damages, if any, when such payments are due from the trust referred to below; | |
• | our obligations concerning issuing temporary Senior Notes, registration of Senior Notes, mutilated, destroyed, lost or stolen Senior Notes and the maintenance of an office or agency for payment and money for security payments held in trust; | |
• | the rights, powers, trusts, duties and immunities of the Senior Notes Trustee, and our and the Subsidiary Guarantors’ obligations in connection therewith; and | |
• | the Legal Defeasance provisions of the Senior Notes Indenture. |
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• | cure any ambiguity, defect or inconsistency; | |
• | provide for uncertificated Senior Notes in addition to or in place of certificated Senior Notes; | |
• | provide for the assumption of our or the Subsidiary Guarantors’ obligations to Holders in the case of a merger or consolidation; | |
• | make any change that would provide any additional rights or benefits to the Holders or that does not adversely affect the legal rights of any such Holder under the Senior Notes Indenture or the Senior Notes; | |
• | release any Subsidiary Guarantee permitted to be released under the terms of the Senior Notes Indenture; | |
• | comply with requirements of the SEC in order to effect or maintain the qualification of the Senior Notes Indenture under the Trust Indenture Act; or | |
• | comply with the requirements of the Senior Notes Trustee and the Depositary (including its nominees) with respect to transfers of beneficial interests in the Senior Notes. |
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• | pays to the unsuitable person any dividend, interest, or any distribution whatsoever; | |
• | recognizes any voting right by the unsuitable person in connection with those securities; | |
• | pays the unsuitable person remuneration in any form; or | |
• | makes any payment to the unsuitable person by way of principal, redemption, conversion, exchange, liquidation, or similar transaction. |
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• | a percentage of the gross gaming revenues received by the casino operation; | |
• | the number of gaming devices operated by the casino; or | |
• | the number of table games operated by the casino. |
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• | holders will not recognize taxable gain or loss as a result of exchanging their unregistered notes for registered notes; | |
• | the holding period for a registered note received will include the holding period of the unregistered note exchanged therefor; and | |
• | the adjusted tax basis of a registered note received will be the same as the adjusted tax basis of the unregistered note exchanged therefor immediately before such exchange. |
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• | an individual who is a citizen or resident of the U.S.; | |
• | a corporation or other entity taxable for U.S. federal income tax purposes as a corporation created or organized in or under the laws of the U.S., any state thereof or the District of Columbia; | |
• | an estate the income of which is subject to U.S. federal income taxation regardless of its source; or | |
• | a trust if a court within the U.S. is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust. |
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• | fails to furnish its social security or other taxpayer identification number within a reasonable time after a request for such information; | |
• | furnishes an incorrect taxpayer identification number or fails to report interest properly; or | |
• | fails, under certain circumstances, to provide a certified statement, signed under penalty of perjury, that the taxpayer identification number provided is its correct number and that the U.S. Holder is not subject to backup withholding. |
• | an actual or constructive owner of 10% or more of the total combined voting power of all our voting stock; or | |
• | a controlled foreign corporation related, directly or indirectly, to us through stock ownership. |
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• | such gain is effectively connected with the conduct by suchNon-U.S. Holder of a trade or business within the U.S.; | |
• | theNon-U.S. Holder is an individual who is present in the U.S. for 183 days or more in the taxable year of the disposition and certain other conditions are satisfied; or | |
• | theNon-U.S. Holder is subject to tax under provisions of the Internal Revenue Code applicable to certain U.S. expatriates, including certain former citizens or residents of the U.S. |
• | is a U.S. person, | |
• | is a foreign person that derives 50% or more of its gross income for certain periods from the conduct of a trade or business in the United States, | |
• | is a controlled foreign corporation for United States federal income tax purposes, or | |
• | is a foreign partnership that, at any time during its taxable year, has 50% or more of its income or capital interests owned by U.S. persons or is engaged in the conduct of a United States trade or business. |
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• | in theover-the-counter market; | |
• | in negotiated transactions; | |
• | through the writing of options on the senior secured notes or registered senior notes; or | |
• | through a combination of the above methods of resale, |
• | makes any statement in this prospectus untrue in any material respect; | |
• | requires the making of any changes in this prospectus to make the statements in this prospectus not misleading; or |
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• | may impose upon us disclosure obligations that may have a material effect on us, |
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(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
Page | ||||
The Majestic Star Casino, LLC and Subsidiaries | ||||
F-2 | ||||
F-3 | ||||
F-4 | ||||
F-5 | ||||
F-6 | ||||
F-28 | ||||
F-29 | ||||
F-30 | ||||
F-31 | ||||
F-32 | ||||
F-33 | ||||
F-34 | ||||
F-72 | ||||
Trump Indiana, Inc. | ||||
F-73 | ||||
F-74 | ||||
F-75 | ||||
F-76 | ||||
F-77 | ||||
F-78 | ||||
Supplemental Schedule of Debtors in Possession Consolidated Statement of Operations for the period from November 21, 2004 to December 31, 2004 | F-97 | |||
Supplemental Schedule of Debtors in Possession Consolidated Statement of Cash Flows for the period from November 21, 2004 to December 31, 2004 | F-98 | |||
Buffington Harbor Riverboats, LLC | ||||
Report of Independent Auditors | F-99 | |||
Balance Sheets at December 31, 2004 and 2003 | F-100 | |||
Statements of Operations of the years ended December 31, 2004, 2003 and 2002 | F-101 | |||
Statements of Members’ Capital for the years ended December 31, 2004, 2003 and 2002 | F-102 | |||
Statements of Cash Flows for the years ended December 31, 2004, 2003 and 2002 | F-103 | |||
Notes to Financial Statements | F-104 |
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(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
March 31, | December 31, | |||||||
2006 | 2005 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 24,496,619 | $ | 32,368,249 | ||||
Restricted cash | 3,326,881 | 3,190,000 | ||||||
Accounts receivable, less allowance for doubtful accounts of $736,008 and $668,575 as of March 31, 2006, and December 31, 2005, respectively | 4,209,636 | 4,599,414 | ||||||
Inventories | 793,135 | 787,881 | ||||||
Prepaid expenses and deposits | 8,337,753 | 2,433,601 | ||||||
Receivable from affiliate | 305,319 | 169,011 | ||||||
Other current assets | 38,450 | 137,914 | ||||||
Total current assets | 41,507,793 | 43,686,070 | ||||||
Property, equipment and improvements, net | 273,892,396 | 278,132,483 | ||||||
Intangible assets, net | 127,989,878 | 128,854,668 | ||||||
Goodwill | 48,075,479 | 47,250,794 | ||||||
Other assets: | ||||||||
Deferred financing costs, net of accumulated amortization of $3,293,443 and $2,529,369 as of March 31, 2006, and December 31, 2005, respectively | 14,823,594 | 15,263,897 | ||||||
Deferred financing costs, pushed down from Majestic Holdco, net of accumulated amortization of $142,965 and $19,519 as of March 31, 2006, and December 31, 2005, respectively | 2,798,046 | 2,804,227 | ||||||
Other assets | 2,148,972 | 1,966,693 | ||||||
Total other assets | 19,770,612 | 20,034,817 | ||||||
Total assets | $ | 511,236,158 | $ | 517,958,832 | ||||
LIABILITIES AND MEMBER’S DEFICIT | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 2,890,858 | $ | 3,559,207 | ||||
Short-term note payable | — | 984,590 | ||||||
Current portion of long-term debt | 167,820 | 174,447 | ||||||
Accrued liabilities: | ||||||||
Payroll and related | 10,883,441 | 9,266,247 | ||||||
Interest | 18,717,566 | 7,216,379 | ||||||
Property and franchise taxes | 7,572,143 | 8,415,639 | ||||||
Other accrued liabilities | 13,957,734 | 16,456,976 | ||||||
Total current liabilities | 54,189,562 | 46,073,485 | ||||||
Long-term debt, net of current maturities | 528,841,387 | 547,403,183 | ||||||
Long-term debt pushed down from Majestic Holdco, net of discount of $16,833,051 as of March 31, 2006, and $18,203,665 as of December 31, 2005, respectively | 46,666,949 | 45,296,335 | ||||||
Total liabilities | 629,697,898 | 638,773,003 | ||||||
Member’s deficit | (118,461,740 | ) | (120,814,171 | ) | ||||
Total liabilities and member’s deficit | $ | 511,236,158 | $ | 517,958,832 | ||||
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(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
For the Three Months Ended | ||||||||
March 31, | ||||||||
2006 | 2005 | |||||||
Operating Revenues: | ||||||||
Casino | $ | 103,885,491 | $ | 71,082,647 | ||||
Rooms | 2,764,392 | 1,794,104 | ||||||
Food and beverage | 4,355,076 | 3,510,376 | ||||||
Other | 1,748,010 | 1,057,730 | ||||||
Gross revenues | 112,752,969 | 77,444,857 | ||||||
Less promotional allowances | 12,834,835 | 10,589,797 | ||||||
Net operating revenues | 99,918,134 | 66,855,060 | ||||||
Operating Costs and Expenses: | ||||||||
Casino | 22,930,677 | 17,292,879 | ||||||
Rooms | 1,184,204 | 383,945 | ||||||
Food and beverage | 2,116,372 | 1,501,341 | ||||||
Other | 258,065 | 259,478 | ||||||
Gaming taxes | 24,423,328 | 15,298,189 | ||||||
Advertising and promotion | 4,150,145 | 3,493,500 | ||||||
General and administrative | 15,028,535 | 10,406,497 | ||||||
Corporate expense | 1,817,704 | 1,197,070 | ||||||
Economic incentive tax—City of Gary | 1,806,989 | 1,163,362 | ||||||
Depreciation and amortization | 7,772,749 | 4,635,935 | ||||||
Loss on investment in Buffington Harbor Riverboats, LLC | — | 605,698 | ||||||
(Gain) loss on disposal of assets | (14,990 | ) | 140 | |||||
Total operating costs and expenses | 81,473,778 | 56,238,034 | ||||||
Operating income | 18,444,356 | 10,617,026 | ||||||
Other Income (Expense): | ||||||||
Interest income | 136,067 | 12,202 | ||||||
Interest expense | (13,313,889 | ) | (7,236,375 | ) | ||||
Interest expense—debt pushed down from Majestic Holdco | (1,494,358 | ) | — | |||||
Other non-operating expense | (27,248 | ) | (36,954 | ) | ||||
Total other expense | (14,699,428 | ) | (7,261,127 | ) | ||||
Net income | $ | 3,744,928 | $ | 3,355,899 | ||||
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(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
Member’s Deficit | ||||
Balance, December 31, 2004 | $ | (102,399,523 | ) | |
Net loss | (5,301,690 | ) | ||
Contribution of Deficit in BHPA from Affiliate | (6,351,134 | ) | ||
Distributions to Barden Development, Inc. | (6,761,824 | ) | ||
Balance, December 31, 2005 | (120,814,171 | ) | ||
Net income | 3,744,928 | |||
Distribution to Barden Development, Inc. | (1,392,497 | ) | ||
Balance, March 31, 2006 | $ | (118,461,740 | ) | |
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(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
For the Three Months | ||||||||
Ended March 31, | ||||||||
2006 | 2005 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net income | $ | 3,744,928 | $ | 3,355,899 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation | 6,907,959 | 4,076,951 | ||||||
Amortization | 864,790 | 558,984 | ||||||
Amortization of deferred financing costs | 784,899 | — | ||||||
Amortization of bond discount on 121/2% senior discount notes and deferred financing costs pushed down from Majestic Holdco | 1,494,358 | — | ||||||
Loss on investment in Buffington Harbor Riverboats, LLC | — | 605,698 | ||||||
Loss (gain) on disposal of assets | (14,990 | ) | 140 | |||||
Changes in operating assets and liabilities, net of effects of acquisition: | ||||||||
Accounts receivable, net | 389,778 | (13,886 | ) | |||||
Related party payables | (181,130 | ) | — | |||||
Inventories | (5,254 | ) | 39,590 | |||||
Prepaid expenses and deposits | (5,904,150 | ) | (1,601,993 | ) | ||||
Other assets | (82,815 | ) | (581,309 | ) | ||||
Accounts payable | 223,032 | 127,665 | ||||||
Accrued payroll and other expenses | 1,172,896 | 539,812 | ||||||
Accrued interest | 11,501,772 | 6,633,766 | ||||||
Other accrued liabilities | (4,514,800 | ) | 599,736 | |||||
Net cash provided by operating activities | 16,381,273 | 14,341,053 | ||||||
Cash Flows from Investing Activities: | ||||||||
Increase in restricted cash | (136,881 | ) | — | |||||
Acquisition of property and equipment | (3,161,899 | ) | (3,147,585 | ) | ||||
Additional acquisition costs related to Trump Indiana acquisition | 188,795 | — | ||||||
Decrease in prepaid leases and deposits | — | 2,000 | ||||||
Proceeds from disposal of equipment | 168,874 | — | ||||||
Net cash used in investing activities | (2,941,111 | ) | (3,145,585 | ) | ||||
Cash Flows from Financing Activities: | ||||||||
Issuance costs for the 91/2% senior secured notes | (48,239 | ) | — | |||||
Issuance costs for the 93/4% senior notes | (241,463 | ) | — | |||||
Issuance costs for 121/2% senior discounted notes pushed down from Majestic Holdco | (76,580 | ) | — | |||||
Proceeds from line of credit | 1,269,560 | 3,000,000 | ||||||
Repayment of line of credit | (19,800,000 | ) | (8,000,000 | ) | ||||
Advances to affiliates—net | — | (2,871,634 | ) | |||||
Repayment of debt | (1,022,573 | ) | — | |||||
Distributions to Barden Development, Inc. | (1,392,497 | ) | (1,153,493 | ) | ||||
Net cash used in financing activities | (21,311,792 | ) | (9,025,127 | ) | ||||
Net (decrease) increase in cash and cash equivalents | (7,871,630 | ) | 2,170,341 | |||||
Cash and cash equivalents, beginning of period | 32,368,249 | 16,721,729 | ||||||
Cash and cash equivalents, end of period | $ | 24,496,619 | $ | 18,892,070 | ||||
Supplemental disclosure of cash flow information and non-cash investing and financing activities: | ||||||||
Interest Paid: | ||||||||
Line of credit | $ | 1,164,709 | $ | 602,610 | ||||
City of Black Hawk—note payable | 15,410 | — | ||||||
Other | 6,131 | — | ||||||
Total | $ | 1,186,250 | $ | 602,610 | ||||
Non-Cash Investing and Financing Activities: | ||||||||
Capital assets acquired from incurring accounts payable and accrued liabilities | $ | 240,048 | $ | 989,493 | ||||
Deferred financing and transaction costs related to the Trump acquisition included in accrued liabilities | 129,058 | — | ||||||
Severance costs included in goodwill and accrued payroll | 444,298 | — | ||||||
Total | $ | 813,404 | $ | 989,493 | ||||
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(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
Note 1. | Organization |
• | A casino-hotel located in Tunica County, Mississippi (“Fitzgeralds Tunica”). |
• | A casino located in Black Hawk, Colorado (“Fitzgeralds Black Hawk”). On July 12, 2004, the Company entered into an agreement to sell substantially all of the net assets of Fitzgeralds Black Hawk, which sale was subsequently terminated as of April 14, 2005. The financial information for Fitzgeralds Black Hawk has been presented as continuing operations for all periods presented in the accompanying statements of operations. See Note 2—Basis of Presentation. |
• | The Majestic Star Casino Capital Corp. (“MSCC”) is a co-obligor with the Company for the $300.0 million 91/2% senior secured notes (the “Senior Secured Notes”) due 2010. MSCC has no assets or operations. See Note 8—Long Term Debt. |
• | Majestic Star Casino Capital Corp. II (“MSCC II”) is a co-obligor with the Company for the $200.0 million 93/4% senior notes (the “Senior Notes”) due 2011. MSCC II has no assets or operations. See Note 8—Long Term Debt. |
Note 2. | Basis of Presentation |
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(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)
Note 2. | Basis of Presentation—(continued) |
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(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)
Note 2. | Basis of Presentation—(continued) |
For the Three Months Ended March 31, | ||||||||
2006 | 2005 | |||||||
Rooms | $ | 588,356 | $ | 608,693 | ||||
Food and Beverage | 2,569,654 | 2,249,667 | ||||||
Other | 116,866 | 112,800 | ||||||
Total | $ | 3,274,876 | $ | 2,971,160 | ||||
For the Three Months Ended March 31, | ||||||||
2006 | 2005 | |||||||
Cash based promotional activities | $ | 6,162,999 | $ | 5,266,399 | ||||
Slot club and other | 1,795,855 | 1,295,040 | ||||||
Retail cost of rooms, food, beverage and other | 4,875,981 | 4,028,358 | ||||||
Total | $ | 12,834,835 | $ | 10,589,797 | ||||
Note 3. | Recently Issued Accounting Pronouncements |
• | Financial Accounting Standards No. 151, “Inventory Costs-an amendment of ARB No. 43, Chapter 4” (“SFAS 151”). SFAS 151 amends ARB No. 43, Chapter 4, “Inventory Pricing,” to clarify the accounting for abnormal amounts of idle facility expense, freight, handling costs, and wasted material (spoilage). SFAS 151 is effective for financial statements for fiscal years beginning after June 15, 2005. The Company adopted SFAS 151 without any material impact on the Company’s financial position, results of operations or cash flows. | |
• | Financial Accounting Standards No 154, “Accounting Changes and Error Corrections—a replacement of APB No. 20 and FASB Statement No. 3” (“SFAS 154”). SFAS 154 replaces APB No. 20, “Accounting Changes,” and FASB Statement No. 3, “Reporting Accounting Changes in Interim Financial Statement,” and changes the requirements for the accounting for and reporting of a change in accounting principle. SFAS 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. The Company adopted SFAS 154 without any material impact on the Company’s financial position, results of operations or cash flows. |
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(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)
Note 4. | Trump Indiana Acquisition |
Goodwill as of December 31, 2005 | $ | 41,328,396 | ||
Severance payments | 1,127,063 | |||
Other | (302,378 | ) | ||
Goodwill as of March 31, 2006 | $ | 42,153,081 | ||
Note 5. | Restricted Cash |
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(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)
Note 5. | Restricted Cash— (continued) |
Note 6. | Intangible Assets |
Gross Carrying | Accumulated | Net Amount | Expected | |||||||||||||
As of March 31, 2006 | Amount | Amortization | March 31, 2006 | Life | ||||||||||||
(In thousands) | ||||||||||||||||
Intangible assets: | ||||||||||||||||
Customer relationship | $ | 24,540 | $ | (4,817 | ) | $ | 19,723 | 8 yrs | ||||||||
Trade name | 3,450 | (1,490 | ) | 1,960 | 10 yrs | |||||||||||
Gaming license | 105,700 | — | 105,700 | indefinite | ||||||||||||
Riverboat excursion license | 700 | (93 | ) | 607 | 15 yrs | |||||||||||
Total intangible assets | $ | 134,390 | $ | (6,400 | ) | $ | 127,990 | |||||||||
Gross Carrying | Accumulated | Net Amount | Expected | |||||||||||||
As of December 31, 2005 | Amount | Amortization | December 31, 2005 | Life | ||||||||||||
(In thousands) | ||||||||||||||||
Intangible assets: | ||||||||||||||||
Customer relationship | $ | 24,540 | $ | (4,050 | ) | $ | 20,490 | 8 yrs | ||||||||
Trade name | 3,450 | (1,403 | ) | 2,047 | 10 yrs | |||||||||||
Gaming license | 105,700 | — | 105,700 | indefinite | ||||||||||||
Riverboat excursion license | 700 | (82 | ) | 618 | 15 yrs | |||||||||||
Total intangible assets | $ | 134,390 | $ | (5,535 | ) | $ | 128,855 | |||||||||
F-10
Table of Contents
(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)
Note 6. | Intangible Assets— (continued) |
Note 7. | Investment in Buffington Harbor Riverboats, L.L.C. |
F-11
Table of Contents
(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)
Note 7. | Investment in Buffington Harbor Riverboats, L.L.C.— (continued) |
For the | ||||
Three Months Ended | ||||
March 31, 2005 | ||||
Statement of Operations | ||||
Gross revenues | $ | 3,048,670 | ||
Operating loss | $ | (1,211,340 | ) | |
Net loss | $ | (1,211,398 | ) | |
F-12
Table of Contents
(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)
Note 7. | Investment in Buffington Harbor Riverboats, L.L.C.— (continued) |
Note 8. | Long-Term Debt |
March 31, | December 31, | |||||||
2006 | 2005 | |||||||
Long-term debt outstanding is as follows: | ||||||||
$300,000,000 of 91/2% senior secured notes | $ | 300,000,000 | $ | 300,000,000 | ||||
$200,000,000 of 93/4% senior notes | 200,000,000 | 200,000,000 | ||||||
$80,000,000 senior secured credit facility | 28,681,906 | 47,212,346 | ||||||
Capitalized leases and other debt | 327,301 | 365,284 | ||||||
Total long-term debt | 529,009,207 | 547,577,630 | ||||||
Less current maturities | 167,820 | 174,447 | ||||||
Total long-term debt, net of current maturities | $ | 528,841,387 | $ | 547,403,183 | ||||
F-13
Table of Contents
(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)
Note 8. | Long-Term Debt— (continued) |
F-14
Table of Contents
(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)
Note 8. | Long-Term Debt— (continued) |
F-15
Table of Contents
(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)
Note 8. | Long-Term Debt— (continued) |
Note 9. | Commitments and Contingencies |
F-16
Table of Contents
(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)
Note 9. | Commitments and Contingencies— (continued) |
F-17
Table of Contents
(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)
Note 9. | Commitments and Contingencies— (continued) |
Note 10. | Related Party Transactions |
F-18
Table of Contents
(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)
Note 10. | Related Party Transactions— (continued) |
Note 11. | Segment Information |
F-19
Table of Contents
(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)
Note 11. | Segment Information— (continued) |
For the | ||||||||
Three Months Ended | ||||||||
March 31, | ||||||||
2006 | 2005 | |||||||
(In thousands) | ||||||||
Net revenues: | ||||||||
Majestic Star | $ | 35,108 | $ | 36,176 | ||||
Majestic Star Casino II | 34,284 | — | ||||||
Buffington Harbor Riverboats | 119 | — | ||||||
Buffington Harbor Parking Associates | — | — | ||||||
Total Majestic Properties | 69,511 | 36,176 | ||||||
Fitzgeralds Tunica | 21,733 | 21,516 | ||||||
Fitzgeralds Black Hawk | 8,674 | 9,163 | ||||||
Total | $ | 99,918 | $ | 66,855 | ||||
Operating income (loss): | ||||||||
Majestic Star | $ | 9,248 | $ | 5,628 | ||||
Majestic Star Casino II | 9,519 | — | ||||||
Buffington Harbor Riverboats | (3,541 | ) | — | |||||
Buffington Harbor Parking Associates | (361 | ) | — | |||||
Total Majestic Properties | 14,865 | 5,628 | ||||||
Fitzgeralds Tunica | 3,679 | 3,305 | ||||||
Fitzgeralds Black Hawk | 1,742 | 2,971 | ||||||
Corporate(1) | (1,842 | ) | (1,217 | ) | ||||
Majestic Investor Holdings(2) | — | (70 | ) | |||||
Total | $ | 18,444 | $ | 10,617 | ||||
Segment depreciation and amortization: | ||||||||
Majestic Star | $ | 1,871 | $ | 2,071 | ||||
Majestic Star Casino II | 2,092 | — | ||||||
Buffington Harbor Riverboats | 920 | — | ||||||
Buffington Harbor Parking Associate | 144 | — | ||||||
Total Majestic Properties | 5,027 | 2,071 | ||||||
Fitzgeralds Tunica | 2,146 | 2,476 | ||||||
Fitzgeralds Black Hawk | 576 | — | ||||||
Corporate(1) | 24 | 20 | ||||||
Majestic Investor Holdings(2) | — | 69 | ||||||
Total | $ | 7,773 | $ | 4,636 | ||||
Expenditure for additions to long-lived assets: | ||||||||
Majestic Star | $ | 2,077 | $ | 891 | ||||
Majestic Star Casino II | 76 | — | ||||||
Buffington Harbor Riverboats | 13 | — | ||||||
Fitzgeralds Tunica | 502 | 1,850 | ||||||
Fitzgeralds Black Hawk | 489 | 407 | ||||||
Corporate(1) | 5 | — | ||||||
Total | $ | 3,162 | $ | 3,148 | ||||
F-20
Table of Contents
(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)
Note 11. | Segment Information— (continued) |
As of | As of | |||||||
March 31, | December 31, | |||||||
2006 | 2005 | |||||||
(In thousands) | ||||||||
Segment assets: | ||||||||
Majestic Star(3) | $ | 117,469 | $ | 243,475 | ||||
Majestic Star Casino II | 225,598 | 229,246 | ||||||
Buffington Harbor Riverboats | 53,015 | 53,751 | ||||||
Buffington Harbor Parking Associates | 22,002 | 21,592 | ||||||
Fitzgeralds Tunica | 73,704 | 75,406 | ||||||
Fitzgeralds Black Hawk | 37,338 | 31,688 | ||||||
Corporate(3) | 381,254 | 289,353 | ||||||
Majestic Investor Holdings(2) | — | 1,896 | ||||||
Total | 910.380 | 946,407 | ||||||
Less: Intercompany | (399,144 | ) | (428,448 | ) | ||||
Total | $ | 511,236 | $ | 517,959 | ||||
Goodwill | ||||||||
Majestic Star | $ | — | $ | — | ||||
Majestic Star Casino II | 42,153 | 41,328 | ||||||
Fitzgeralds Tunica | 3,998 | 3,998 | ||||||
Fitzgeralds Black Hawk | 1,925 | 1,925 | ||||||
Total | $ | 48,076 | $ | 47,251 | ||||
(1) | Corporate expenses reflect payroll, benefits, travel and other costs associated with our corporate staff and are not allocated to the properties. |
(2) | Majestic Investor Holdings was merged into the Company on March 22, 2006. |
(3) | The combined assets of Majestic Star and Corporate include intercompany receivables from Majestic Star II, Fitzgeralds Tunica, BHR, BHPA, and Fitzgeralds Black Hawk totaling approximately $399.1 million at March 31, 2006. At December 31, 2005, the combined assets of Majestic Star include intercompany receivables from Investor Holdings, Fitzgeralds Tunica and Fitzgeralds Black Hawk of $428.4 million. Intercompany receivables are eliminated in consolidation. |
Note 12. | Supplemental Guarantor Financial Information |
F-21
Table of Contents
(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)
Note 12. | Supplemental Guarantor Financial Information — (continued) |
As of March 31, 2006
The Majestic | The Majestic | |||||||||||||||||||
Star Casino, | Star Casino | Guarantor | Eliminating | Total | ||||||||||||||||
LLC | Capital Corp. | Subsidiaries | Entries | Consolidated | ||||||||||||||||
ASSETS | ||||||||||||||||||||
Current assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 11,036,241 | $ | — | $ | 13,460,378 | $ | — | $ | 24,496,619 | ||||||||||
Restricted cash | 2,166,881 | — | 1,160,000 | — | 3,326,881 | |||||||||||||||
Accounts receivable, net | 1,184,161 | — | 3,025,475 | — | 4,209,636 | |||||||||||||||
Inventories | 61,168 | — | 731,967 | — | 793,135 | |||||||||||||||
Prepaid expenses and deposits | 2,451,956 | — | 5,885,797 | — | 8,337,753 | |||||||||||||||
Receivable from affiliate | 642,988 | — | 4,537,110 | (4,874,779 | )(a) | 305,319 | ||||||||||||||
Investment in subsidiaries | 89,927,510 | — | — | (89,927,510 | )(b) | — | ||||||||||||||
Other current assets | — | — | 38,450 | — | 38,450 | |||||||||||||||
Total current assets | 107,470,905 | — | 28,839,177 | (94,802,289 | ) | 41,507,793 | ||||||||||||||
Property, equipment and improvements, net | 75,137,621 | — | 198,754,775 | — | 273,892,396 | |||||||||||||||
Intangible assets, net | — | — | 127,989,878 | — | 127,989,878 | |||||||||||||||
Goodwill | — | — | 48,075,479 | — | 48,075,479 | |||||||||||||||
Other assets: | ||||||||||||||||||||
Deferred financing and transaction costs related to the acquisition of Trump Indiana | 14,823,594 | — | — | — | 14,823,594 | |||||||||||||||
Deferred financing and transaction costs pushed down from Majestic Holdco(1) | 2,798,046 | — | — | — | 2,798,046 | |||||||||||||||
Long term receivable—related party | 298,084,202 | — | 6,257,546 | (304,341,748 | )(a) | — | ||||||||||||||
Other assets | 408,421 | — | 1,740,551 | — | 2,148,972 | |||||||||||||||
Total other assets | 316,114,263 | — | 7,998,097 | (304,341,748 | ) | 19,770,612 | ||||||||||||||
Total assets | $ | 498,722,789 | $ | — | $ | 411,657,406 | $ | (399,144,037 | ) | $ | 511,236,158 | |||||||||
LIABILITIES AND MEMBER’S DEFICIT | ||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||
Accounts payable | $ | 1,031,594 | $ | — | $ | 1,859,264 | $ | — | $ | 2,890,858 | ||||||||||
Current portion of long-term debt | — | — | 167,820 | — | 167,820 | |||||||||||||||
Payable to related party | 4,537,061 | — | 337,718 | (4,874,779 | )(a) | — | ||||||||||||||
Accrued liabilities: | ||||||||||||||||||||
Payroll and related | 3,841,853 | — | 7,041,588 | — | 10,883,441 | |||||||||||||||
Interest | 18,717,566 | — | — | — | 18,717,566 | |||||||||||||||
Property and franchise taxes | 3,146,894 | — | 4,425,249 | — | 7,572,143 | |||||||||||||||
Other accrued liabilities | 4,303,160 | — | 9,654,574 | — | 13,957,734 | |||||||||||||||
Total current liabilities | 35,578,128 | — | 23,486,213 | (4,874,779 | ) | 54,189,562 | ||||||||||||||
Due to related parties | 6,257,546 | — | 298,084,202 | (304,341,748 | )(a) | — | ||||||||||||||
Long-term debt, net of current maturities | 528,681,906 | 300,000,000 | 159,481 | (300,000,000 | )(c) | 528,841,387 | ||||||||||||||
Long-term debt pushed down from Majestic Holdco(2) | 46,666,949 | — | — | — | 46,666,949 | |||||||||||||||
Total liabilities | 617,184,529 | 300,000,000 | 321,729,896 | (609,216,527 | ) | 629,697,898 | ||||||||||||||
Member’s (deficit) equity | (118,461,740 | ) | (300,000,000 | ) | 89,927,510 | 210,072,490 | (b)(c) | (118,461,740 | ) | |||||||||||
Total liabilities and member’s (deficit) equity | $ | 498,722,789 | $ | — | $ | 411,657,406 | $ | (399,144,037 | ) | $ | 511,236,158 | |||||||||
(a) | To eliminate intercompany receivable and payables. | |
(b) | To eliminate intercompany accounts and investment in subsidiaries. | |
(c) | As more fully described in Note 8. Long-Term Debt, the Majestic Star Casino Capital Corp. is a co-obligor of the Senior Secured Notes issued by the Company. Accordingly, such indebtedness has been presented as an obligation of both the issuer and the co-obligor in the above balance sheets. | |
(1) | Reflects the pushdown of deferred financing costs related to the issuance of the Discount Notes of Majestic Holdco, net of amortization, pursuant to SEC Staff Accounting Bulletin Topic 5(J). | |
(2) | Reflects the pushdown of Majestic Holdco’s Discount Notes pursuant to SEC Staff Accounting Bulletin Topic 5(J). |
F-22
Table of Contents
(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)
Note 12. | Supplemental Guarantor Financial Information — (continued) |
As of December 31, 2005
The Majestic | The Majestic | |||||||||||||||||||
Star Casino, | Star Casino | Guarantor | Eliminating | Total | ||||||||||||||||
LLC | Capital Corp. | Subsidiaries | Entries | Consolidated | ||||||||||||||||
ASSETS | ||||||||||||||||||||
Current assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 7,085,458 | $ | — | $ | 25,282,791 | $ | — | $ | 32,368,249 | ||||||||||
Restricted cash | 900,000 | — | 2,290,000 | — | 3,190,000 | |||||||||||||||
Accounts receivable, net | 1,528,727 | — | 3,070,687 | — | 4,599,414 | |||||||||||||||
Inventories | 60,476 | — | 727,405 | — | 787,881 | |||||||||||||||
Prepaid expenses and deposits | 918,195 | — | 1,515,406 | — | 2,433,601 | |||||||||||||||
Receivable from affiliate | 9,851,352 | — | — | (9,682,341 | )(a) | 169,011 | ||||||||||||||
Other current assets | — | — | 137,914 | — | 137,914 | |||||||||||||||
Total current assets | 20,344,208 | — | 33,024,203 | (9,682,341 | ) | 43,686,070 | ||||||||||||||
Property, equipment and improvements, net | 75,421,809 | — | 202,710,674 | — | 278,132,483 | |||||||||||||||
Intangible assets, net | — | — | 128,854,668 | — | 128,854,668 | |||||||||||||||
Goodwill | — | — | 47,250,794 | — | 47,250,794 | |||||||||||||||
Other assets: | ||||||||||||||||||||
Deferred financing and transaction cost related to the acquisition of Trump Indiana | 15,263,897 | — | — | — | 15,263,897 | |||||||||||||||
Deferred financing and transaction cost pushed down from Majestic Holdco(1) | 2,804,227 | — | — | — | 2,804,227 | |||||||||||||||
Long term receivable—related party | 418,765,178 | — | — | (418,765,178 | )(a) | — | ||||||||||||||
Other assets | 228,363 | — | 1,738,330 | — | 1,966,693 | |||||||||||||||
Total other assets | 437,061,665 | — | 1,738,330 | (418,765,178 | ) | 20,034,817 | ||||||||||||||
Total assets | $ | 532,827,682 | $ | — | $ | 413,578,669 | $ | (428,447,519 | ) | $ | 517,958,832 | |||||||||
LIABILITIES AND MEMBER’S DEFICIT | ||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||
Accounts payable | $ | 1,775,675 | $ | — | $ | 1,783,532 | $ | — | $ | 3,559,207 | ||||||||||
Note payable | — | — | 984,590 | — | 984,590 | |||||||||||||||
Current portion of long-term debt | — | — | 174,447 | — | 174,447 | |||||||||||||||
Payable to related party | 714,240 | — | 8,968,101 | (9,682,341 | )(a) | — | ||||||||||||||
Accrued liabilities: | ||||||||||||||||||||
Payroll and related | 3,095,817 | — | 6,170,430 | — | 9,266,247 | |||||||||||||||
Interest | 7,215,793 | — | 586 | — | 7,216,379 | |||||||||||||||
Property and franchise taxes | 3,763,331 | — | 4,652,308 | — | 8,415,639 | |||||||||||||||
Other accrued liabilities | 5,465,515 | — | 10,991,461 | — | 16,456,976 | |||||||||||||||
Total current liabilities | 22,030,371 | — | 33,725,455 | (9,682,341 | ) | 46,073,485 | ||||||||||||||
Investment in subsidiaries | 23,381,935 | — | — | (23,381,935 | )(b) | — | ||||||||||||||
Due to related parties | 15,720,866 | — | 403,044,312 | (418,765,178 | )(a) | — | ||||||||||||||
Long-term debt, net of current maturities | 547,212,346 | 300,000,000 | 190,837 | (300,000,000 | )(c) | 547,403,183 | ||||||||||||||
Long-term debt pushed down from Majestic Holdco(2) | 45,296,335 | — | — | — | 45,296,335 | |||||||||||||||
Total liabilities | 653,641,853 | 300,000,000 | 436,960,604 | (751,829,454 | ) | 638,773,003 | ||||||||||||||
Member’s deficit | (120,814,171 | ) | (300,000,000 | ) | (23,381,935 | ) | 323,381,935 | (b)(c) | (120,814,171 | ) | ||||||||||
Total liabilities and member’s deficit | $ | 532,827,682 | $ | — | $ | 413,578,669 | $ | (428,447,519 | ) | $ | 517,958,832 | |||||||||
(a) | To eliminate intercompany receivable and payables. | |
(b) | To eliminate intercompany accounts and investment in subsidiaries. | |
(c) | As more fully described in Note 8, Long-Term Debt, the Majestic Star Casino Capital Corp. is a co-obligor of the Senior Secured Notes issued by the Company. Accordingly, such indebtedness has been presented as an obligation of both the issuer and the co-obligor in the above balance sheets. | |
(1) | Reflects the pushdown of deferred financing costs related to the issuance of the Discount Notes of Majestic Holdco, net of amortization, pursuant to SEC Staff Accounting Bulletin Topic 5(J). | |
(2) | Reflects the pushdown of Majestic Holdco’s Discount Notes pursuant to SEC Staff Accounting Bulletin Topic 5(J). |
F-23
Table of Contents
(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)
Note 12. | Supplemental Guarantor Financial Information — (continued) |
The Majestic | The Majestic | |||||||||||||||||||
Star Casino, | Star Casino | Guarantor | Eliminating | Total | ||||||||||||||||
LLC | Capital Corp. | Subsidiaries | Entries | Consolidated | ||||||||||||||||
Operating Revenues: | ||||||||||||||||||||
Casino | $ | 36,449,145 | $ | — | $ | 67,436,346 | $ | — | $ | 103,885,491 | ||||||||||
Rooms | — | — | 2,764,392 | — | 2,764,392 | |||||||||||||||
Food and beverage | 502,154 | — | 3,852,922 | — | 4,355,076 | |||||||||||||||
Other | 684,398 | — | 1,063,612 | — | 1,748,010 | |||||||||||||||
Gross revenues | 37,635,697 | — | 75,117,272 | — | 112,752,969 | |||||||||||||||
Less promotional allowances | 2,527,220 | — | 10,307,615 | — | 12,834,835 | |||||||||||||||
Net operating revenues | 35,108,477 | — | 64,809,657 | — | 99,918,134 | |||||||||||||||
Operating Costs and Expenses: | ||||||||||||||||||||
Casino | 6,336,859 | — | 16,593,818 | — | 22,930,677 | |||||||||||||||
Rooms | — | — | 1,184,204 | — | 1,184,204 | |||||||||||||||
Food and beverage | 509,162 | — | 1,607,210 | — | 2,116,372 | |||||||||||||||
Other | 173 | — | 257,892 | — | 258,065 | |||||||||||||||
Gaming taxes | 10,401,865 | — | 14,021,463 | — | 24,423,328 | |||||||||||||||
Advertising and promotion | 1,385,138 | — | 2,765,007 | — | 4,150,145 | |||||||||||||||
General and administrative | 4,438,775 | — | 10,589,760 | — | 15,028,535 | |||||||||||||||
Corporate expense | 1,817,704 | — | — | — | 1,817,704 | |||||||||||||||
Economic incentive tax—City of Gary | 920,732 | — | 886,257 | — | 1,806,989 | |||||||||||||||
Depreciation and amortization | 1,894,304 | — | 5,878,445 | — | 7,772,749 | |||||||||||||||
Gain on disposal of assets | (2,727 | ) | — | (12,263 | ) | — | (14,990 | ) | ||||||||||||
Total operating costs and expenses | 27,701,985 | — | 53,771,793 | — | 81,473,778 | |||||||||||||||
Operating income | 7,406,492 | — | 11,037,864 | — | 18,444,356 | |||||||||||||||
Other Income (Expense): | ||||||||||||||||||||
Interest income | 74,620 | — | 61,447 | — | 136,067 | |||||||||||||||
Interest expense | (13,451,786 | ) | — | 137,897 | — | (13,313,889 | ) | |||||||||||||
Interest expense—debt pushed down from Majestic Holdco (1)(2) | (1,494,358 | ) | — | — | — | (1,494,358 | ) | |||||||||||||
Other non-operating expense | (27,248 | ) | — | — | — | (27,248 | ) | |||||||||||||
Equity in net income of subsidiaries | 11,237,208 | — | — | (11,237,208 | )(a) | — | ||||||||||||||
Total other expense | (3,661,564 | ) | — | 199,344 | (11,237,208 | ) | (14,699,428 | ) | ||||||||||||
Net income | $ | 3,744,928 | $ | — | $ | 11,237,208 | $ | (11,237,208 | ) | $ | 3,744,928 | |||||||||
(a) | To eliminate equity in net income of subsidiaries. | |
(1) | Includes amortization of deferred financing costs related to the issuance of Majestic Holdco’s Discount Notes pursuant to SEC Staff Accounting Bulletin Topic 5(J). | |
(2) | Includes interest expense on Majestic Holdco’s Discount Notes pursuant to SEC Staff Accounting Bulletin Topic 5(J). |
F-24
Table of Contents
(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)
Note 12. | Supplemental Guarantor Financial Information — (continued) |
For the Three Months Ended March 31, 2005
The Majestic | The Majestic | |||||||||||||||||||
Star Casino, | Star Casino | Guarantor | Eliminating | Total | ||||||||||||||||
LLC | Capital Corp. | Subsidiaries | Entries(a) | Consolidated | ||||||||||||||||
Operating Revenues: | ||||||||||||||||||||
Casino | $ | 38,697,169 | $ | — | $ | 32,385,478 | $ | — | $ | 71,082,647 | ||||||||||
Rooms | — | — | 1,794,104 | — | 1,794,104 | |||||||||||||||
Food and beverage | 442,523 | — | 3,067,853 | — | 3,510,376 | |||||||||||||||
Other | 665,118 | — | 392,612 | — | 1,057,730 | |||||||||||||||
Gross revenues | 39,804,810 | — | 37,640,047 | — | 77,444,857 | |||||||||||||||
Less promotional allowances | 3,629,072 | — | 6,960,725 | — | 10,589,797 | |||||||||||||||
Net operating revenues | 36,175,738 | — | 30,679,322 | — | 66,855,060 | |||||||||||||||
Operating Costs and Expenses: | ||||||||||||||||||||
Casino | 7,131,087 | — | 10,161,792 | — | 17,292,879 | |||||||||||||||
Rooms | — | — | 383,945 | — | 383,945 | |||||||||||||||
Food and beverage | 512,287 | — | 989,054 | — | 1,501,341 | |||||||||||||||
Other | — | — | 259,478 | — | 259,478 | |||||||||||||||
Gaming taxes | 11,070,263 | — | 4,227,926 | — | 15,298,189 | |||||||||||||||
Advertising and promotion | 1,724,678 | — | 1,768,822 | — | 3,493,500 | |||||||||||||||
General and administrative | 6,270,029 | — | 4,136,468 | — | 10,406,497 | |||||||||||||||
Corporate expense | 1,197,070 | — | — | — | 1,197,070 | |||||||||||||||
Economic incentive tax—City of Gary | 1,163,362 | — | — | — | 1,163,362 | |||||||||||||||
Depreciation and amortization | 2,090,447 | — | 2,545,488 | — | 4,635,935 | |||||||||||||||
Loss on investment in Buffington Harbor Riverboats, LLC | 605,698 | — | — | — | 605,698 | |||||||||||||||
Loss on disposal of assets | — | — | 140 | — | 140 | |||||||||||||||
Total operating costs and expenses | 31,764,921 | — | 24,473,113 | — | 56,238,034 | |||||||||||||||
Operating income | 4,410,817 | — | 6,206,209 | — | 10,617,026 | |||||||||||||||
Other Income (Expense): | ||||||||||||||||||||
Interest income | 4,968 | — | 7,234 | — | 12,202 | |||||||||||||||
Interest expense | (6,761,807 | ) | — | (474,568 | ) | — | (7,236,375 | ) | ||||||||||||
Other non-operating expense | (36,954 | ) | — | — | — | (36,954 | ) | |||||||||||||
Equity in net income of subsidiaries | 5,738,875 | — | — | (5,738,875 | ) | — | ||||||||||||||
Total other expense | (1,054,918 | ) | — | (467,334 | ) | (5,738,875 | ) | (7,261,127 | ) | |||||||||||
Net income | $ | 3,355,899 | $ | — | $ | 5,738,875 | $ | (5,738,875 | ) | $ | 3,355,899 | |||||||||
(a) | To eliminate equity in net income of subsidiaries. |
F-25
Table of Contents
(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)
Note 12. | Supplemental Guarantor Financial Information — (continued) |
For the Three Months Ended March 31, 2006
The Majestic | The Majestic | |||||||||||||||||||
Star Casino, | Star Casino | Guarantor | Eliminating | Total | ||||||||||||||||
LLC | Capital Corp. | Subsidiaries | Entries | Consolidated | ||||||||||||||||
Net Cash Provided by (Used in) Operating Activities:(1) | $ | 18,754,085 | $ | — | $ | (2,372,812 | ) | $ | — | $ | 16,381,273 | |||||||||
Cash Flows from Investing Activities: | ||||||||||||||||||||
Increase in restricted cash | (16,881 | ) | — | (120,000 | ) | — | (136,881 | ) | ||||||||||||
Additional acquisition costs related to Trump Indiana acquisition | — | — | 188,795 | — | 188,795 | |||||||||||||||
Acquisition of property and equipment | (2,081,598 | ) | — | (1,080,301 | ) | — | (3,161,899 | ) | ||||||||||||
Merger of Majestic Investor Holdings into Majestic Star | 600,328 | — | (600,328 | ) | — | — | ||||||||||||||
Proceeds from disposal of assets | 134,068 | — | 34,806 | — | 168,874 | |||||||||||||||
Net cash used in investing activities | (1,364,083 | ) | — | (1,577,028 | ) | — | (2,941,111 | ) | ||||||||||||
Cash Flows from Financing Activities: | ||||||||||||||||||||
Issuance costs for the 91/2% senior secured notes | (48,239 | ) | — | — | — | (48,239 | ) | |||||||||||||
Issuance costs for the 93/4% senior notes | (241,463 | ) | — | — | — | (241,463 | ) | |||||||||||||
Issuance costs for the 121/2% senior discount notes pushed down from Majestic Holdco(2) | (76,580 | ) | — | — | — | (76,580 | ) | |||||||||||||
Proceeds from line of credit | 1,269,560 | — | — | — | 1,269,560 | |||||||||||||||
Repayment of line of credit | (19,800,000 | ) | — | — | — | (19,800,000 | ) | |||||||||||||
Repayment of debt | — | — | (1,022,573 | ) | — | (1,022,573 | ) | |||||||||||||
Cash advances from (to) affiliates | 6,850,000 | — | (6,850,000 | ) | — | — | ||||||||||||||
Distribution to Barden Development, Inc. | (1,392,497 | ) | — | — | — | (1,392,497 | ) | |||||||||||||
Net cash used in financing activities | (13,439,219 | ) | — | (7,872,573 | ) | — | (21,311,792 | ) | ||||||||||||
Net increase (decrease) in cash and cash equivalents | 3,950,783 | — | (11,822,413 | ) | — | (7,871,630 | ) | |||||||||||||
Cash and cash equivalents, beginning of period | 7,085,458 | — | 25,282,791 | — | 32,368,249 | |||||||||||||||
Cash and cash equivalents, end of period | $ | 11,036,241 | $ | — | $ | 13,460,378 | $ | — | $ | 24,496,619 | ||||||||||
(1) | Includes amortization of deferred financing costs of $0.1 million and interest expense of $1.4 million related to the pushdown of Majestic Holdco’s Discount Notes pursuant to SEC Staff Accounting Bulletin Topic 5(J). | |
(2) | Reflects the pushdown of issuance costs of Majestic Holdco’s Discount Notes pursuant to SEC Staff Accounting Bulletin Topic 5(J). |
F-26
Table of Contents
(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) — (Continued)
Note 12. | Supplemental Guarantor Financial Information — (continued) |
For the Three Months Ended March 31, 2005
The Majestic | The Majestic | |||||||||||||||||||
Star Casino, | Star Casino | Guarantor | Eliminating | Total | ||||||||||||||||
LLC | Capital Corp. | Subsidiaries | Entries | Consolidated | ||||||||||||||||
Net Cash Provided by Operating Activities: | $ | 5,708,327 | $ | — | $ | 8,632,726 | $ | — | $ | 14,341,053 | ||||||||||
Cash Flows from Investing Activities: | ||||||||||||||||||||
Acquisition of property and equipment | (891,332 | ) | — | (2,256,253 | ) | — | (3,147,585 | ) | ||||||||||||
Decrease in prepaid leases and deposits | 2,000 | — | — | — | 2,000 | |||||||||||||||
Net cash used in investing activities | (889,332 | ) | — | (2,256,253 | ) | — | (3,145,585 | ) | ||||||||||||
Cash Flows from Financing Activities: | ||||||||||||||||||||
Proceeds from line of credit | 3,000,000 | — | — | — | 3,000,000 | |||||||||||||||
Repayment of line of credit | (8,000,000 | ) | — | — | — | (8,000,000 | ) | |||||||||||||
Advances to affiliates—net | (2,871,634 | ) | — | — | — | (2,871,634 | ) | |||||||||||||
Cash advances from (to) affiliates | 5,600,000 | — | (5,600,000 | ) | — | — | ||||||||||||||
Distribution to Barden Development, Inc. | (1,153,493 | ) | — | — | — | (1,153,493 | ) | |||||||||||||
Net cash used in financing activities | (3,425,127 | ) | — | (5,600,000 | ) | — | (9,025,127 | ) | ||||||||||||
Net increase in cash and cash equivalents | 1,393,868 | — | 776,473 | — | 2,170,341 | |||||||||||||||
Cash and cash equivalents, beginning of period | 8,433,545 | — | 8,288,184 | — | 16,721,729 | |||||||||||||||
Cash and cash equivalents, end of period | $ | 9,827,413 | $ | — | $ | 9,064,657 | $ | — | $ | 18,892,070 | ||||||||||
F-27
Table of Contents
F-28
Table of Contents
F-29
Table of Contents
(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
December 31, | ||||||||
2005 | 2004 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 32,368,249 | $ | 16,721,729 | ||||
Restricted cash | 3,190,000 | 2,540,008 | ||||||
Accounts receivable, less allowance for doubtful accounts of $668,575 and $631,240 as of December 31, 2005 and December 31, 2004, respectively | 4,599,414 | 2,127,715 | ||||||
Inventories | 787,881 | 689,370 | ||||||
Prepaid expenses and deposits | 2,433,601 | 2,300,345 | ||||||
Receivable from affiliate | 169,011 | 715,216 | ||||||
Other current assets | 137,914 | — | ||||||
Total current assets | 43,686,070 | 25,094,383 | ||||||
Property, equipment and improvements, net | 278,132,483 | 165,165,759 | ||||||
Intangible assets, net | 128,854,668 | 8,117,216 | ||||||
Goodwill | 47,250,794 | 5,922,398 | ||||||
Other assets: | ||||||||
Deferred financing costs, net of accumulated amortization of $2,529,369 and $1,767,700 as of December 31, 2005 and December 31, 2004, respectively | 15,263,897 | 5,361,723 | ||||||
Deferred financing costs, pushed down from Majestic Holdco, net of accumulated amortization of $19,519 as of December 31, 2005 | 2,804,227 | — | ||||||
Investment in Buffington Harbor Riverboats, LLC | — | 27,432,270 | ||||||
Other assets | 1,966,693 | 9,282,715 | ||||||
Total other assets | 20,034,817 | 42,076,708 | ||||||
Total assets | $ | 517,958,832 | $ | 246,376,464 | ||||
LIABILITIES AND MEMBER’S DEFICIT | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 3,559,207 | $ | 1,938,112 | ||||
Short-term note payable | 984,590 | — | ||||||
Current portion of long-term debt | 174,447 | — | ||||||
Accrued liabilities: | ||||||||
Payroll and related | 9,266,247 | 6,602,764 | ||||||
Interest | 7,216,379 | 5,523,719 | ||||||
Property and franchise taxes | 8,415,639 | 5,574,172 | ||||||
Other accrued liabilities | 16,456,976 | 12,279,260 | ||||||
Total current liabilities | 46,073,485 | 31,918,027 | ||||||
Long-term debt, net | 547,403,183 | 316,857,960 | ||||||
Long-term debt pushed down from Majestic Holdco, net of discount of $18,203,665 as of December 31, 2005 | 45,296,335 | — | ||||||
Total liabilities | 638,773,003 | 348,775,987 | ||||||
Member’s deficit | (120,814,171 | ) | (102,399,523 | ) | ||||
Total liabilities and member’s deficit | $ | 517,958,832 | $ | 246,376,464 | ||||
F-30
Table of Contents
(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
For the Years Ended December 31, | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
Operating Revenues: | ||||||||||||
Casino | $ | 280,918,520 | $ | 274,768,525 | $ | 255,385,819 | ||||||
Rooms | 7,726,464 | 7,673,287 | 7,932,811 | |||||||||
Food and beverage | 14,030,267 | 13,461,856 | 12,799,586 | |||||||||
Other | 4,965,862 | 4,579,061 | 3,966,417 | |||||||||
Gross revenues | 307,641,113 | 300,482,729 | 280,084,633 | |||||||||
Less promotional allowances | 45,669,261 | 39,972,022 | 35,129,527 | |||||||||
Net operating revenues | 261,971,852 | 260,510,707 | 244,955,106 | |||||||||
Operating Costs and Expenses: | ||||||||||||
Casino | 67,910,637 | 69,792,622 | 67,383,625 | |||||||||
Rooms | 1,763,340 | 1,784,333 | 2,552,127 | |||||||||
Food and beverage | 5,865,541 | 6,124,468 | 5,262,936 | |||||||||
Other | 1,040,514 | 1,656,233 | 1,179,893 | |||||||||
Gaming taxes | 61,053,037 | 59,179,733 | 55,252,255 | |||||||||
Advertising and promotion | 15,230,150 | 16,269,641 | 14,666,285 | |||||||||
General and administrative | 42,931,535 | 43,639,590 | 39,652,734 | |||||||||
Corporate expense | 7,717,108 | 3,399,281 | 3,456,161 | |||||||||
Economic incentive tax—City of Gary | 4,709,154 | 4,494,170 | 4,103,010 | |||||||||
Depreciation and amortization | 22,612,185 | 17,985,674 | 17,488,800 | |||||||||
Amortization—debt pushed down from Majestic Holdco | 19,519 | — | — | |||||||||
Loss on investment in Buffington Harbor Riverboats, LLC | 2,354,799 | 2,465,612 | 2,395,436 | |||||||||
Loss (gain) on disposal of assets | 52,790 | (31,130 | ) | 117,097 | ||||||||
Total operating costs and expenses | 233,260,309 | 226,760,227 | 213,510,359 | |||||||||
Operating income | 28,711,543 | 33,750,480 | 31,444,747 | |||||||||
Other Income (Expense): | �� | |||||||||||
Interest income | 332,335 | 111,497 | 104,331 | |||||||||
Interest expense | (30,362,182 | ) | (28,641,694 | ) | (31,282,788 | ) | ||||||
Interest expense—debt pushed down from Majestic Holdco | (167,520 | ) | — | — | ||||||||
Loss on extinguishment of debt | (3,688,480 | ) | — | (31,960,083 | ) | |||||||
Other non-operating expense | (127,386 | ) | (201,757 | ) | (185,574 | ) | ||||||
Total other expense | (34,013,233 | ) | (28,731,954 | ) | (63,324,114 | ) | ||||||
(Loss) income from continuing operations | (5,301,690 | ) | 5,018,526 | (31,879,367 | ) | |||||||
Discontinued operation | — | — | (11,972,607 | ) | ||||||||
Net (loss) income | $ | (5,301,690 | ) | $ | 5,018,526 | $ | (43,851,974 | ) | ||||
F-31
Table of Contents
(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
Member’s Deficit | ||||
Balance, December 31, 2002 | $ | (24,174,562 | ) | |
Net loss | (43,851,974 | ) | ||
Distribution to Barden Development, Inc. | (6,065,213 | ) | ||
Spin-off of Barden Nevada Gaming, LLC to Barden Development Inc. | (27,515,400 | ) | ||
Cash paid in excess of historical cost for land purchased from a related party | (559,806 | ) | ||
Balance, December 31, 2003 | (102,166,955 | ) | ||
Net income | 5,018,526 | |||
Distribution to Barden Development, Inc. | (5,251,094 | ) | ||
Balance, December 31, 2004 | (102,399,523 | ) | ||
Net loss | (5,301,690 | ) | ||
Contribution of Deficit in BHPA from Affiliate | (6,351,134 | ) | ||
Distributions to Barden Development, Inc. | (6,761,824 | ) | ||
Balance, December 31, 2005 | $ | (120,814,171 | ) | |
F-32
Table of Contents
(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
For the Years Ended December 31, | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
Cash Flows from Operating Activities: | ||||||||||||
Net (loss) income | $ | (5,301,690 | ) | $ | 5,018,526 | $ | (43,851,974 | ) | ||||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||||||
Depreciation | 19,513,964 | 15,501,453 | 12,950,562 | |||||||||
Amortization | 3,098,221 | 2,484,221 | 4,538,238 | |||||||||
Amortization—debt pushed down from Majestic Holdco | 19,519 | — | — | |||||||||
Amortization of bond discount on 121/2% senior discount notes pushed down from Majestic Holdco | 167,520 | — | — | |||||||||
Loss on investment in Buffington Harbor Riverboats, LLC | 2,354,799 | 2,465,612 | 2,395,436 | |||||||||
Loss (gain) on disposal of assets | 52,790 | (31,130 | ) | 117,097 | ||||||||
Loss on extinguishment of debt | 3,688,480 | — | 31,960,083 | |||||||||
Loss on disposal of discontinued operation | — | — | 11,972,607 | |||||||||
Changes in operating assets and liabilities, net of effects of acquisition: | ||||||||||||
Accounts receivable, net | 168,303 | 84,831 | (330,599 | ) | ||||||||
Related party payables | 546,206 | (372,328 | ) | (707,110 | ) | |||||||
Inventories | 140,460 | 18,315 | (44,228 | ) | ||||||||
Prepaid expenses and deposits | 398,371 | (173,764 | ) | (7,297 | ) | |||||||
Other assets | 197,113 | 209,058 | 455,542 | |||||||||
Accounts payable | 698,685 | (5,262,507 | ) | 3,444,422 | ||||||||
Accrued payroll and other expenses | 697,511 | �� | 115,657 | 845,510 | ||||||||
Accrued interest | 1,535,766 | (499,984 | ) | 4,549,918 | ||||||||
Other accrued liabilities | (136,665 | ) | 2,602,094 | 3,688,690 | ||||||||
Net cash provided by operating activities | 27,839,353 | 22,160,054 | 31,976,897 | |||||||||
Cash Flows from Investing Activities: | ||||||||||||
Decrease (increase) in restricted cash | 390,008 | (1,140,008 | ) | (1,150,000 | ) | |||||||
Acquisition of Trump Indiana, Inc., net of cash acquired | (231,994,427 | ) | — | — | ||||||||
Payment of gaming license transfer fee to State of Indiana | (2,000,000 | ) | — | — | ||||||||
Payoff of City of Gary development agreement | (3,506,797 | ) | — | — | ||||||||
Acquisition of property and equipment | (11,783,499 | ) | (36,011,778 | ) | (18,462,990 | ) | ||||||
Distributions of cash to Barden Development, Inc. from spin-off of Barden Nevada Gaming | — | — | (4,395,606 | ) | ||||||||
Appreciated value of land purchase from related party | — | — | (559,806 | ) | ||||||||
Decrease in prepaid leases and deposits | — | 12,683 | 102,417 | |||||||||
Investment in Buffington Harbor Riverboats, LLC | (174,342 | ) | (164,289 | ) | (295,719 | ) | ||||||
Proceeds from disposal of equipment | 135,709 | 339,797 | 77,154 | |||||||||
Other | 209,926 | — | — | |||||||||
Net cash used in investing activities | (248,723,422 | ) | (36,963,595 | ) | (24,684,550 | ) | ||||||
Cash Flows from Financing Activities: | ||||||||||||
Payment of premium on early extinguishment of debt | (1,053,905 | ) | — | (19,262,330 | ) | |||||||
Issuance cost for the 91/2% senior secured notes | (1,805,572 | ) | (229,507 | ) | (4,420,000 | ) | ||||||
Issuance costs for the 93/4% senior notes | (9,026,094 | ) | — | — | ||||||||
Issuance cost for the $80.0 million secured credit facility | (110,000 | ) | (58,652 | ) | (1,583,162 | ) | ||||||
Issuance cost for 121/2% senior discounted notes pushed down from Majestic Holdco | (2,823,746 | ) | — | — | ||||||||
Cash paid for redemption of 11.653% notes | (16,290,000 | ) | — | (135,477,000 | ) | |||||||
Cash paid for redemption of 107/8% notes | — | — | (130,000,000 | ) | ||||||||
Proceeds from issuance of 91/2% senior secured notes | 40,000,000 | — | 260,000,000 | |||||||||
Proceeds from issuance of 93/4% senior notes | 200,000,000 | — | — | |||||||||
Proceeds from issuance of 121/2% senior discount notes pushed down from Majestic Holdco | 45,128,815 | — | — | |||||||||
Proceeds from line of credit | 43,877,024 | 45,251,293 | 28,000,000 | |||||||||
Repayment of line of credit | (37,629,678 | ) | (30,244,786 | ) | (2,041,507 | ) | ||||||
Note repayment from related parties | — | — | 1,067,000 | |||||||||
Repayment of debt | (16,974,431 | ) | — | — | ||||||||
Distributions to Barden Development, Inc. | (6,761,824 | ) | (5,251,094 | ) | (6,065,213 | ) | ||||||
Net cash provided by (used in) financing activities | 236,530,589 | 9,467,254 | (9,782,212 | ) | ||||||||
Net increase (decrease) in cash and cash equivalents | 15,646,520 | (5,336,287 | ) | (2,489,865 | ) | |||||||
Cash and cash equivalents, beginning of period | 16,721,729 | 22,058,016 | 24,547,881 | |||||||||
Cash and cash equivalents, end of period | $ | 32,368,249 | $ | 16,721,729 | $ | 22,058,016 | ||||||
Supplemental disclosure of cash flow information and non-cash investing activities: | ||||||||||||
Interest Paid: | ||||||||||||
State of Colorado sales and use tax assessment | $ | — | $ | 26,338 | $ | — | ||||||
Line of credit | 1,350,648 | 1,968,159 | 92,238 | |||||||||
Notes—fixed interest at 107/8% | — | — | 11,288,794 | |||||||||
Notes—fixed interest at 11.653% | 1,898,274 | 1,899,081 | 15,317,338 | |||||||||
Senior Secured Notes—fixed interest at 91/2% | 24,700,000 | 25,248,889 | — | |||||||||
Other | 46 | — | — | |||||||||
Total | $ | 27,948,968 | $ | 29,142,467 | $ | 26,698,370 | ||||||
Non-Cash Investing Activities: | ||||||||||||
Capital assets acquired from incurring accounts payable and accrued liabilities | $ | 535,363 | $ | 1,296,170 | $ | — | ||||||
Purchase of land by issuing note payable | 984,590 | |||||||||||
Purchase of equipment through capital leases | 70,397 | — | — | |||||||||
Deferred financing and transaction cost related to the Trump acquisition included in accrued liabilities | 440,762 | — | — | |||||||||
Spin-off of equity interests in Barden Nevada net of cash, to Barden Development, Inc. | — | — | 23,938,044 | |||||||||
Credit received from Naming Rights Agreement and applied to acquisition of 170 acres of property from an affiliate | — | 1,500,000 | — | |||||||||
Total | $ | 2,031,111 | $ | 2,796,170 | $ | 23,938,044 | ||||||
F-33
Table of Contents
(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. | Organization |
• | A casino-hotel located in Tunica County, Mississippi (“Fitzgeralds Tunica”). |
• | A casino located in Black Hawk, Colorado (“Fitzgeralds Black Hawk”). On July 12, 2004, the Company entered into an agreement to sell substantially all of the net assets of Fitzgeralds Black Hawk, which sale was subsequently terminated as of April 14, 2005. The financial information for Fitzgeralds Black Hawk has been presented as continuing operations for all periods presented in the accompanying statements of operations. See Note 2—Basis of Presentation and Note 7—Discontinued Operations. | |
• | A casino-hotel located in Las Vegas, Nevada (“Fitzgeralds Las Vegas”). Fitzgeralds Las Vegas was spun off to the Company’s member on December 31, 2003. As a result of the spin-off, operating results of Fitzgeralds Las Vegas have been presented as discontinued operations for the year ended December 31, 2003 in the accompanying statements of operations. See Note 2—Basis of Presentation and Note 7—Discontinued Operations. |
• | The Majestic Star Casino Capital Corp. (“MSCC”) was originally formed for the purpose of facilitating the offering of the Company’s $130.0 million 107/8% senior secured notes due 2006 (the “107/8% notes”). The 107/8% notes were fully purchased and redeemed on October 7, 2003. MSCC is a co-obligor with the Company for the $300.0 million senior secured notes due 2010. MSCC has no assets or operations. See Note 12—Long Term Debt. | |
• | Majestic Investor Capital Corp. (a wholly owned subsidiary of Majestic Investor Holdings (“Investor Holding”) was formed specifically to facilitate the offering of Investor Holdings’ $152.6 million 11.653% senior secured notes due 2007 (the “11.653% notes”). Approximately 89.3%, or $135.5 million, of the 11.653% notes were purchased and redeemed on October 7, 2003 and the remainder was defeased in December 2005. This subsidiary has no assets or operations. See Note 12—Long Term Debt. | |
• | Majestic Star Casino Capital Corp. II (“MSCC II”) was formed in 2005 for the purpose of facilitating the offering of the Company’s $200.0 million 93/4% Senior Notes (the “Senior Notes”). MSCC II is a co-obligor with the Company for the Senior Notes. MSCC II has no assets or operations. See Note 12—Long Term Debt. |
F-34
Table of Contents
(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 1. | Organization—(continued) |
Note 2. | Basis of Presentation |
F-35
Table of Contents
(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 2. | Basis of Presentation—(continued) |
Estimated Useful Life | ||||
Vessels, buildings & improvements | 25-39 years | |||
Site improvements | 9-15 years | |||
Barge and improvements | 13-15 years | |||
Leasehold improvements | 5 years | |||
Furniture, fixtures and equipment | 4-10 years |
F-36
Table of Contents
(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 2. | Basis of Presentation—(continued) |
For the Years Ended December 31, | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
Rooms | $ | 2,377,544 | $ | 2,363,635 | $ | 1,464,915 | ||||||
Food and Beverage | 8,839,650 | 8,627,429 | 8,679,521 | |||||||||
Other | 466,750 | 470,482 | 314,346 | |||||||||
Total | $ | 11,683,944 | $ | 11,461,546 | $ | 10,458,782 | ||||||
For the Years Ended December 31, | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
Cash based promotional activities | $ | 24,479,693 | $ | 19,251,508 | $ | 18,018,123 | ||||||
Slot club and other | 5,791,872 | 5,038,313 | 3,361,473 | |||||||||
Retail cost of rooms, food, beverage and other | 15,397,696 | 15,682,201 | 13,749,931 | |||||||||
Total | $ | 45,669,261 | $ | 39,972,022 | $ | 35,129,527 | ||||||
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Table of Contents
(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 2. | Basis of Presentation—(continued) |
Note 3. | Trump Indiana Acquisition |
F-38
Table of Contents
(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 3. | Trump Indiana Acquisition—(continued) |
F-39
Table of Contents
(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 3. | Trump Indiana Acquisition—(continued) |
Trump | ||||||||||||||||
Indiana | BHR | BHPA | Total | |||||||||||||
Current assets (including cash of $10,845 at Trump Indiana, $208 at BHR and $2 at BHPA) | $ | 15,460 | $ | 1,197 | $ | 651 | $ | 17,308 | ||||||||
Property and equipment | 45,158 | 26,719 | 10,955 | 82,832 | ||||||||||||
Goodwill | 41,328 | — | — | 41,328 | ||||||||||||
Other intangibles | 122,400 | — | — | 122,400 | ||||||||||||
Other assets | 1,168 | 32 | 412 | 1,612 | ||||||||||||
Current liabilities | (12,037 | ) | (1,616 | ) | (2,321 | ) | (15,974 | ) | ||||||||
Long term liabilities | (157 | ) | (140 | ) | (6,160 | ) | (6,457 | ) | ||||||||
Total | $ | 213,320 | $ | 26,192 | $ | 3,537 | $ | 243,049 | ||||||||
For the Years Ended December 31, | ||||||||
2005 | 2004 | |||||||
(In thousands) | ||||||||
Pro Forma | ||||||||
Net revenues | $ | 394,144 | $ | 398,742 | ||||
Net income | $ | (2,644 | ) | $ | (9 | ) |
Note 4. | Recently Issued Accounting Pronouncements |
• | Financial Accounting Standards No. 151, “Inventory Costs-an amendment of ARB No. 43, Chapter 4” (“SFAS 151”). SFAS 151 amends ARB No. 43, Chapter 4, “Inventory Pricing,” to clarify the accounting for abnormal amounts of idle facility expense, freight, handling costs, and wasted material (spoilage). SFAS 151 is effective for financial statements for fiscal years beginning after June 15, 2005. The Company does not believe the adoption of SFAS 151 will have a material impact on the Company’s financial position, results of operations or cash flows. |
• | Financial Accounting Standards No. 153, “Exchanges of Nonmonetary Assets-an amendment of APB Opinion No. 29” (“SFAS 153”). SFAS 153 amends APB Opinion No. 29, “Accounting for Nonmonetary Transactions,” to eliminate the exception for nonmonetary exchanges of similar productive assets and |
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Table of Contents
(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 4. | Recently Issued Accounting Pronouncements— (continued) |
replace it with a general exception for exchanges of nonmonetary assets that do not have commercial substance (i.e., if the future cash flows of the entity are expected to change significantly as a result of the exchange). SFAS 153 became effective on June 15, 2005. The Company adopted SFAS 153 without any material impact on the Company’s financial position, results of operations or cash flows. |
• | Financial Accounting Standards No 154, “Accounting Changes and Error Corrections—a replacement of APB No. 20 and FASB Statement No. 3” (“SFAS 154”). SFAS 154 replaces APB No. 20, “Accounting Changes” and FASB Statement No. 3, “Reporting Accounting Changes in Interim Financial Statement” and changes the requirements for the accounting for and reporting of a change in accounting principle. SFAS 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. The Company does not believe the adoption of SFAS 154 will have a material impact on the Company’s financial position, results of operations or cash flows. |
Note 5. | Certificate of Suitability and Licenses |
Note 6. | City of Gary, Indiana Development Obligation |
F-41
Table of Contents
(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 6. | City of Gary, Indiana Development Obligation—(continued)) |
Note 7. | Discontinued Operations |
F-42
Table of Contents
(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 7. | Discontinued Operations— (continued) |
Note 8. | Property and Equipment |
2005 | 2004 | |||||||
Land | $ | 23,771,120 | $ | 4,467,597 | ||||
Land held for future development | 22,055,537 | 22,112,093 | ||||||
Vessel, buildings & improvements | 170,844,215 | 97,946,299 | ||||||
Site improvements | 39,996,461 | 18,571,317 | ||||||
Barge and improvements | 20,121,678 | 16,106,969 | ||||||
Leasehold improvements | 1,216,700 | 410,828 | ||||||
Furniture, fixtures and equipment | 104,178,185 | 67,160,217 | ||||||
Construction in progress | 2,776,549 | 2,272,929 | ||||||
384,960,445 | 229,048,249 | |||||||
Less accumulated depreciation and amortization | (106,827,962 | ) | (63,882,490 | ) | ||||
Property and equipment, net | $ | 278,132,483 | $ | 165,165,759 | ||||
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Table of Contents
(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 9. | Other Intangible Assets |
Gross Carrying | Accumulated | Net Amount | Expected | |||||||||||||
As of December 31, 2005 | Amount | Amortization | December 31, 2005 | Life | ||||||||||||
(In thousands) | ||||||||||||||||
Intangible assets: | ||||||||||||||||
Customer relationship | $ | 24,540 | $ | (4,050 | ) | $ | 20,490 | 8 yrs | ||||||||
Trade name | 3,450 | (1,403 | ) | 2,047 | 10 yrs | |||||||||||
Gaming license | 105,700 | — | 105,700 | indefinite | ||||||||||||
Riverboat excursion license | 700 | (82 | ) | 618 | 15 yrs | |||||||||||
Total intangible assets | $ | 134,390 | $ | (5,535 | ) | $ | 128,855 | |||||||||
Gross Carrying | Accumulated | Net Amount | Expected | |||||||||||||
As of December 31, 2004 | Amount | Amortization | December 31, 2004 | Life | ||||||||||||
(In thousands) | ||||||||||||||||
Amortized intangible assets: | ||||||||||||||||
Customer relationship | $ | 7,840 | $ | (2,839 | ) | $ | 5,001 | 8 yrs | ||||||||
Trade name | 3,450 | (999 | ) | 2,451 | 10 yrs | |||||||||||
Riverboat excursion license | 700 | (35 | ) | 665 | 15 yrs | |||||||||||
Total intangible assets | $ | 11,990 | $ | (3,873 | ) | $ | 8,117 | |||||||||
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(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 9. | Other Intangible Assets— (continued) |
For the Years Ended December 31, | ||||
2006 | $ | 3,459,167 | ||
2007 | 3,459,167 | |||
2008 | 3,459,167 | |||
2009 | 3,392,043 | |||
2010 | 2,479,167 | |||
Thereafter | 6,905,957 | |||
$ | 23,154,668 | |||
Note 10. | Investment in Buffington Harbor Riverboats, L.L.C. |
Member’s | ||||
Investment in BHR | ||||
Investment balance—December 31, 2003 | $ | 29,733,593 | ||
Contributions | 164,289 | |||
Equity loss of joint venture | (2,465,612 | ) | ||
Investment balance—December 31, 2004 | $ | 27,432,270 | ||
F-45
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(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 10. | Investment in Buffington Harbor Riverboats, L.L.C.— (continued) |
December 31, 2004 | ||||
Balance Sheet | ||||
Cash | $ | 311,052 | ||
Current assets excluding cash | 2,233,904 | |||
Property, plant and equipment, net | 57,199,307 | |||
Other assets | 82,359 | |||
Total assets | $ | 59,826,622 | ||
Current liabilities | $ | 4,657,377 | ||
Capital lease obligations, net of current portion | 304,704 | |||
Total liabilities | 4,962,081 | |||
Total members’ equity | 54,864,541 | |||
Total liabilities and members’ equity | $ | 59,826,622 | ||
The Majestic Star Casino, LLC—member’s equity | $ | 27,432,270 | ||
For the Period | ||||||||||||
January 1 2005 to | For the Years Ended | |||||||||||
December 20, | December 31, | |||||||||||
2005 | 2004 | 2003 | ||||||||||
Statements of Operations | ||||||||||||
Net revenues | $ | 11,513,723 | $ | 11,145,457 | $ | 18,434,627 | ||||||
Operating loss | $ | (4,307,633 | ) | $ | (4,899,426 | ) | $ | (4,785,459 | ) | |||
Net loss | $ | (4,737,505 | ) | $ | (4,931,225 | ) | $ | (4,790,868 | ) | |||
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(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 10. | Investment in Buffington Harbor Riverboats, L.L.C.— (continued) |
F-47
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(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 11. | Other Accrued Liabilities |
As of December 31, | ||||||||
2005 | 2004 | |||||||
Gaming taxes | $ | 2,115,988 | $ | 1,295,980 | ||||
Other taxes | 212,355 | 250,138 | ||||||
Chip & token liability | 616,674 | 784,456 | ||||||
Accrued trade payables | 5,342,688 | 2,808,426 | ||||||
Professional fees | 1,203,026 | 524,045 | ||||||
Accrued rent | — | 1,078,805 | ||||||
Other | 6,966,245 | 5,537,410 | ||||||
$ | 16,456,976 | $ | 12,279,260 | |||||
Note 12. | Long-Term Debt |
December 31, | December 31, | |||||||
2005 | 2004 | |||||||
Long-term debt outstanding at December 31, 2005 and December 31, 2004 is as follows: | ||||||||
$300,000,000 of 91/2% senior secured notes | $ | 300,000,000 | $ | 260,000,000 | ||||
$200,000,000 of 93/4% senior notes | 200,000,000 | — | ||||||
$80,000,000 senior secured credit facility | 47,212,346 | 40,965,000 | ||||||
$16,290,000 of 11.653% unsecured notes, net of discount | — | 15,892,960 | ||||||
Capitalized leases and other debt | 365,284 | — | ||||||
Total long-term debt | 547,577,630 | 316,857,960 | ||||||
Less current maturities | 174,447 | — | ||||||
Total long-term debt, net of current maturities | $ | 547,403,183 | $ | 316,857,960 | ||||
(In thousands) | ||||
For the Years Ended December 31, | ||||
2006 | $ | 174 | ||
2007 | 140 | |||
2008 | 48 | |||
2009 | 3 | |||
2010 | 347,212 | |||
Thereafter | 200,000 | |||
$ | 547,577 | |||
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(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 12. | Long-Term Debt— (continued) |
F-49
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(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 12. | Long-Term Debt— (continued) |
F-50
Table of Contents
(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 12. | Long-Term Debt— (continued) |
F-51
Table of Contents
(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 12. | Long-Term Debt— (continued) |
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(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 13. | Fair Value of Financial Instruments |
Carrying | Estimated | |||||||
Value | Fair Value | |||||||
Assets: | ||||||||
Cash and equivalents | $ | 32,368,249 | $ | 32,368,249 | ||||
Restricted Cash | $ | 3,190,000 | $ | 3,190,000 | ||||
Liabilities: | ||||||||
Short-term debt | ||||||||
Note payable with City of Black Hawk | 984,590 | 984,590 | ||||||
Long-term debt | ||||||||
91/2% Senior Notes | $ | 300,000,000 | $ | 315,750,000 | ||||
93/4% Senior Secured Notes | 200,000,000 | 202,500,000 | ||||||
Senior Secured Credit Facility | 47,212,346 | 47,212,346 | ||||||
Capitalized leases and other debt | 365,284 | 365,284 | ||||||
$ | 547,577,630 | $ | 565,827,630 | |||||
121/2% Discount Notes, pushed down from Majestic Holdco | $ | 45,296,335 | $ | 45,167,550 | ||||
Note 14. | Savings Plan |
Note 15. | Commitments and Contingencies |
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(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 15. | Commitments and Contingencies—(continued) |
For the Years Ended December 31, | ||||
2006 | $ | 1,133,489 | ||
2007 | 523,718 | |||
2008 | 212,784 | |||
2009 | 181,832 | |||
2010 | 91,892 | |||
Thereafter | 45,367 | |||
$ | 2,189,082 | |||
F-54
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(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 15. | Commitments and Contingencies—(continued) |
F-55
Table of Contents
(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 15. | Commitments and Contingencies—(continued) |
F-56
Table of Contents
(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 15. | Commitments and Contingencies—(continued) |
F-57
Table of Contents
(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 15. | Commitments and Contingencies—(continued) |
F-58
Table of Contents
(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 15. | Commitments and Contingencies—(continued) |
Note 16. | Related Party Transactions |
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(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 16. | Related Party Transactions—(continued) |
Note 17. | Segment Information |
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(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 17. | Segment Information—(continued) |
For the Years Ended December 31, | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
(In thousands) | ||||||||||||
Net revenues: | ||||||||||||
Majestic Star | $ | 139,005 | $ | 141,058 | $ | 129,312 | ||||||
Majestic Star Casino II | 4,606 | — | — | |||||||||
Fitzgeralds Tunica | 82,939 | 83,218 | 83,670 | |||||||||
Fitzgeralds Black Hawk | 35,409 | 36,235 | 31,973 | |||||||||
Buffington Harbor Riverboats | 13 | — | — | |||||||||
Buffington Harbor Parking | — | — | — | |||||||||
Total | $ | 261,972 | $ | 260,511 | $ | 244,955 | ||||||
Operating income (loss): | ||||||||||||
Majestic Star | $ | 18,782 | $ | 16,465 | $ | 17,135 | ||||||
Majestic Star Casino II | 1,007 | — | — | |||||||||
Fitzgeralds Tunica | 10,253 | 11,471 | 13,022 | |||||||||
Fitzgeralds Black Hawk | 7,393 | 9,973 | 7,132 | |||||||||
Corporate (1)(2) | (7,916 | ) | (3,470 | ) | (3,456 | ) | ||||||
Majestic Investor Holdings | (289 | ) | (689 | ) | (2,388 | ) | ||||||
Buffington Harbor Riverboats | (475 | ) | — | — | ||||||||
Buffington Harbor Parking | (43 | ) | — | — | ||||||||
Total | $ | 28,712 | $ | 33,750 | $ | 31,445 | ||||||
Segment depreciation and amortization: | ||||||||||||
Majestic Star | $ | 8,565 | $ | 7,784 | $ | 5,771 | ||||||
Majestic Star Casino II | 252 | — | — | |||||||||
Fitzgeralds Tunica | 10,062 | 8,858 | 7,820 | |||||||||
Fitzgeralds Black Hawk | 3,125 | 995 | 1,730 | |||||||||
Corporate (1)(2) | 199 | 71 | 63 | |||||||||
Majestic Investor Holdings | 269 | 278 | 2,105 | |||||||||
Buffington Harbor Riverboats | 141 | — | — | |||||||||
Buffington Harbor Parking | 18 | — | — | |||||||||
Total | $ | 22,632 | $ | 17,986 | $ | 17,489 | ||||||
Expenditure for additions to long-lived assets: | ||||||||||||
Majestic Star | $ | 3,725 | $ | 28,692 | $ | 12,205 | ||||||
Majestic Star Casino II | 427 | — | — | |||||||||
Fitzgeralds Tunica | 4,860 | 5,800 | 4,395 | |||||||||
Fitzgeralds Black Hawk | 2,655 | 1,520 | 1,863 | |||||||||
Corporate(1) | 116 | — | — | |||||||||
Buffington Harbor Riverboats | — | — | — | |||||||||
Buffington Harbor Parking | — | — | — | |||||||||
Total | $ | 11,783 | $ | 36,012 | $ | 18,463 | ||||||
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(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 17. | Segment Information—(continued) |
As of December 31, 2005 | As of December 31, 2004 | |||||||
(In thousands) | ||||||||
Segment assets: | ||||||||
Majestic Star(3) | $ | 243,475 | $ | 254,702 | ||||
Majestic Star Casino II | 229,246 | — | ||||||
Fitzgeralds Tunica | 75,406 | 80,452 | ||||||
Fitzgeralds Black Hawk | 31,688 | 31,032 | ||||||
Corporate(1) | 289,353 | — | ||||||
Majestic Investor Holdings | 1,896 | 2,158 | ||||||
Buffington Harbor Riverboats | 53,751 | — | ||||||
Buffington Harbor Parking | 21,592 | — | ||||||
Total | 946,407 | 368,344 | ||||||
Less: Intercompany | (428,448 | ) | (121,968 | ) | ||||
Total | $ | 517,959 | $ | 246,376 | ||||
Goodwill | ||||||||
Majestic Star Casino II | $ | 41,328 | $ | — | ||||
Fitzgeralds Tunica | 3,998 | 3,998 | ||||||
Fitzgeralds Black Hawk | 1,925 | 1,924 | ||||||
Total | $ | 47,251 | $ | 5,922 | ||||
(1) | Corporate expenses reflect payroll, benefits, travel and other costs associated with our corporate staff and are not allocated to the properties. | |
(2) | Corporate includes the pushdown from Majestic Holdco of financing costs related to the issuance of the Discount Notes, net of amortization, of $2.8 million. The associated amortization, which is reflected in Corporate’s depreciation and amortization expense, is $20,000. | |
(3) | The assets of Majestic Star and Corporate include intercompany receivables from Majestic Star II, Fitzgeralds Tunica, BHR, BHPA, Investor Holdings and Fitzgeralds Black Hawk totaling approximately $428.4 million at December 31, 2005. At December 31, 2004, the assets of Majestic Star include intercompany receivables from Investor Holdings, Fitzgeralds Tunica and Fitzgeralds Black Hawk of $122.0 million. Intercompany receivables are eliminated in consolidation. |
Note 18. | Subsequent Event |
Note 19. | Supplemental Guarantor Financial Information |
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(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
As of December 31, 2005
The | ||||||||||||||||||||
The | Majestic Star | |||||||||||||||||||
Majestic Star | Casino Capital | Guarantor | Eliminating | Total | ||||||||||||||||
Casino, LLC | Corp. | Subsidiaries | Entries | Consolidated | ||||||||||||||||
ASSETS | ||||||||||||||||||||
Current assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 7,085,458 | $ | — | $ | 25,282,791 | $ | — | $ | 32,368,249 | ||||||||||
Restricted cash | 900,000 | — | 2,290,000 | — | 3,190,000 | |||||||||||||||
Accounts receivable, net | 1,528,727 | — | 3,070,687 | — | 4,599,414 | |||||||||||||||
Inventories | 60,476 | — | 727,405 | — | 787,881 | |||||||||||||||
Prepaid expenses and deposits | 918,195 | — | 1,515,406 | — | 2,433,601 | |||||||||||||||
Receivable from affiliate | 9,851,352 | — | — | (9,682,341 | )(a) | 169,011 | ||||||||||||||
Other current assets | — | — | 137,914 | — | 137,914 | |||||||||||||||
Total current assets | 20,344,208 | — | 33,024,203 | (9,682,341 | ) | 43,686,070 | ||||||||||||||
Property, equipment and improvements, net | 75,421,809 | — | 202,710,674 | — | 278,132,483 | |||||||||||||||
Intangible assets, net | — | — | 128,854,668 | — | 128,854,668 | |||||||||||||||
Goodwill | — | — | 47,250,794 | — | 47,250,794 | |||||||||||||||
Other assets: | ||||||||||||||||||||
Deferred financing and transaction cost related to the acquisition of Trump Indiana | 15,263,897 | — | — | — | 15,263,897 | |||||||||||||||
Deferred financing and transaction cost pushed down from Majestic Holdco(1) | 2,804,227 | — | — | — | 2,804,227 | |||||||||||||||
Long term receivable—related party | 418,765,178 | — | — | (418,765,178 | )(a) | — | ||||||||||||||
Other assets | 228,363 | — | 1,738,330 | — | 1,966,693 | |||||||||||||||
Total other assets | 437,061,665 | — | 1,738,330 | (418,765,178 | ) | 20,034,817 | ||||||||||||||
Total assets | $ | 532,827,682 | $ | — | $ | 413,578,669 | $ | (428,447,519 | ) | $ | 517,958,832 | |||||||||
LIABILITIES AND MEMBER’S DEFICIT | ||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||
Accounts payable | $ | 1,775,675 | $ | — | $ | 1,783,532 | $ | — | $ | 3,559,207 | ||||||||||
Note payable | — | — | 984,590 | — | 984,590 | |||||||||||||||
Current portion of long-term debt | — | — | 174,447 | — | 174,447 | |||||||||||||||
Payable to related party | 714,240 | — | 8,968,101 | (9,682,341 | )(a) | — | ||||||||||||||
Accrued liabilities: | ||||||||||||||||||||
Payroll and related | 3,095,817 | — | 6,170,430 | — | 9,266,247 | |||||||||||||||
Interest | 7,215,793 | — | 586 | — | 7,216,379 | |||||||||||||||
Property and franchise taxes | 3,763,331 | — | 4,652,308 | — | 8,415,639 | |||||||||||||||
Other accrued liabilities | 5,465,515 | — | 10,991,461 | — | 16,456,976 | |||||||||||||||
Total current liabilities | 22,030,371 | — | 33,725,455 | (9,682,341 | ) | 46,073,485 | ||||||||||||||
Investment in subsidiaries | 23,381,935 | — | — | (23,381,935 | )(b) | — | ||||||||||||||
Due to related parties | 15,720,866 | — | 403,044,312 | (418,765,178 | )(a) | — | ||||||||||||||
Long-term debt, net of current maturities | 547,212,346 | 300,000,000 | 190,837 | (300,000,000 | )(c) | 547,403,183 | ||||||||||||||
Long-term debt pushed down from Majestic Holdco(2) | 45,296,335 | — | — | — | 45,296,335 | |||||||||||||||
Total liabilities | 653,641,853 | 300,000,000 | 436,960,604 | (751,829,454 | ) | 638,773,003 | ||||||||||||||
Member’s deficit | (120,814,171 | ) | (300,000,000 | ) | (23,381,935 | ) | 323,381,935 | (b)(c) | (120,814,171 | ) | ||||||||||
Total liabilities and member’s deficit | $ | 532,827,682 | $ | — | $ | 413,578,669 | $ | (428,447,519 | ) | $ | 517,958,832 | |||||||||
(a) | To eliminate intercompany receivable and payables. | |
(b) | To eliminate intercompany accounts and investment in subsidiaries. | |
(c) | As more fully described in Note 12, Long Term Debt, The Majestic Star Casino Capital Corp. is a co-obligor of the Senior Secured Notes issued by the Company. Accordingly, such indebtedness has been presented as an obligation of both the issuer and the co-obligor in the above balance sheets. | |
(1) | Reflects the pushdown of deferred financing costs related to the issuance of the Discount Notes of Majestic Holdco, net of amortization. | |
(2) | Reflects the pushdown of Majestic Holdco’s Discount Notes pursuant to SEC Staff Accounting Bulleting Topic 5(J). |
F-64
Table of Contents
(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
As of December 31, 2004
The Majestic | The Majestic | |||||||||||||||||||
Star Casino, | Star Casino | Guarantor | Eliminating | Total | ||||||||||||||||
LLC | Capital Corp. | Subsidiaries | Entries | Consolidated | ||||||||||||||||
ASSETS | ||||||||||||||||||||
Current assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 8,433,545 | $ | — | $ | 8,288,184 | $ | — | $ | 16,721,729 | ||||||||||
Restricted cash | 900,000 | — | 1,640,008 | — | 2,540,008 | |||||||||||||||
Accounts receivable, net | 1,329,576 | — | 798,139 | — | 2,127,715 | |||||||||||||||
Inventories | 92,303 | — | 597,067 | — | 689,370 | |||||||||||||||
Prepaid expenses and deposits | 1,575,936 | — | 724,409 | — | 2,300,345 | |||||||||||||||
Receivable from affiliate | 775,722 | — | 21,799 | (82,305 | )(a) | 715,216 | ||||||||||||||
Total current assets | 13,107,082 | — | 12,069,606 | (82,305 | ) | 25,094,383 | ||||||||||||||
Property, equipment and improvements, net | 78,679,302 | — | 86,486,457 | — | 165,165,759 | |||||||||||||||
Intangible assets, net | — | — | 8,117,216 | — | 8,117,216 | |||||||||||||||
Goodwill | — | — | 5,922,398 | — | 5,922,398 | |||||||||||||||
Other assets: | ||||||||||||||||||||
Deferred financing costs, net | 4,947,983 | — | 413,740 | — | 5,361,723 | |||||||||||||||
Investment in Buffington Harbor Riverboat, LLC | 27,432,270 | — | — | — | 27,432,270 | |||||||||||||||
Long term receivable—related party | 121,884,816 | — | — | (121,884,816 | )(a) | — | ||||||||||||||
Other assets | 8,650,694 | — | 632,021 | — | 9,282,715 | |||||||||||||||
Total other assets | 162,915,763 | — | 1,045,761 | (121,884,816 | ) | 42,076,708 | ||||||||||||||
Total assets | $ | 254,702,147 | $ | — | $ | 113,641,438 | $ | (121,967,121 | ) | $ | 246,376,464 | |||||||||
LIABILITIES AND MEMBER’S DEFICIT | ||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||
Accounts payable | $ | 940,307 | $ | — | $ | 997,805 | $ | — | $ | 1,938,112 | ||||||||||
Payable to related party | — | — | 82,305 | (82,305 | )(a) | — | ||||||||||||||
Accrued liabilities: | ||||||||||||||||||||
Payroll and related | 3,216,179 | — | 3,386,585 | — | 6,602,764 | |||||||||||||||
Interest | 5,365,530 | — | 158,189 | — | 5,523,719 | |||||||||||||||
Property and franchise taxes | 4,811,880 | — | 762,292 | — | 5,574,172 | |||||||||||||||
Other accrued liabilities | 6,040,223 | — | 6,239,037 | — | 12,279,260 | |||||||||||||||
Total current liabilities | 20,374,119 | — | 11,626,213 | (82,305 | ) | 31,918,027 | ||||||||||||||
Investment in subsidiaries | 35,762,551 | — | — | (35,762,551 | )(b) | — | ||||||||||||||
Due to related parties | — | — | 121,884,816 | (121,884,816 | )(a) | — | ||||||||||||||
Long-term debt, net of current maturities | 300,965,000 | 260,000,000 | 15,892,960 | (260,000,000 | )(c) | 316,857,960 | ||||||||||||||
Total liabilities | 357,101,670 | 260,000,000 | 149,403,989 | (417,729,672 | ) | 348,775,987 | ||||||||||||||
Member’s deficit | (102,399,523 | ) | (260,000,000 | ) | (35,762,551 | ) | 295,762,551 | (b)(c) | (102,399,523 | ) | ||||||||||
Total liabilities and member’s deficit | $ | 254,702,147 | $ | — | $ | 113,641,438 | $ | (121,967,121 | ) | $ | 246,376,464 | |||||||||
(a) | To eliminate intercompany receivable and payables. | |
(b) | To eliminate intercompany accounts and investment in subsidiaries. | |
(c) | As more fully described in Note 12, Long Term Debt, The Majestic Star Casino Capital Corp. is a co-obligor of the Senior Secured Notes issued by the Company. Accordingly, such indebtedness has been presented as an obligation of both the issuer and the co-obligor in the above balance sheets. |
F-65
Table of Contents
(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
For the Year Ended December 31, 2005
The | ||||||||||||||||||||
The | Majestic Star | |||||||||||||||||||
Majestic Star | Casino Capital | Guarantor | Eliminating | Total | ||||||||||||||||
Casino, LLC | Corp. | Subsidiaries | Entries(a) | Consolidated | ||||||||||||||||
Operating Revenues: | ||||||||||||||||||||
Casino | $ | 150,552,871 | $ | — | $ | 130,365,649 | $ | — | $ | 280,918,520 | ||||||||||
Rooms | — | — | 7,726,464 | — | 7,726,464 | |||||||||||||||
Food and beverage | 1,761,489 | — | 12,268,778 | — | 14,030,267 | |||||||||||||||
Other | 3,205,243 | — | 1,760,619 | — | 4,965,862 | |||||||||||||||
Gross revenues | 155,519,603 | — | 152,121,510 | — | 307,641,113 | |||||||||||||||
Less promotional allowances | 16,514,443 | — | 29,154,818 | — | 45,669,261 | |||||||||||||||
Net operating revenues | 139,005,160 | — | 122,966,692 | — | 261,971,852 | |||||||||||||||
Operating Costs and Expenses: | ||||||||||||||||||||
Casino | 27,580,681 | — | 40,329,956 | — | 67,910,637 | |||||||||||||||
Rooms | — | — | 1,763,340 | — | 1,763,340 | |||||||||||||||
Food and beverage | 1,999,116 | — | 3,866,425 | — | 5,865,541 | |||||||||||||||
Other | — | — | 1,040,514 | — | 1,040,514 | |||||||||||||||
Gaming taxes | 43,151,499 | — | 17,901,538 | — | 61,053,037 | |||||||||||||||
Advertising and promotion | 7,509,472 | — | 7,720,678 | — | 15,230,150 | |||||||||||||||
General and administrative | 24,589,215 | — | 18,342,320 | — | 42,931,535 | |||||||||||||||
Corporate expense | 7,717,108 | — | — | — | 7,717,108 | |||||||||||||||
Economic incentive tax—City of Gary | 4,520,228 | — | 188,926 | — | 4,709,154 | |||||||||||||||
Depreciation and amortization | 8,744,095 | — | 13,868,090 | — | 22,612,185 | |||||||||||||||
Amortization—debt pushed down from Holdco(1) | 19,519 | — | — | — | 19,519 | |||||||||||||||
Loss on investment in Buffington Harbor Riverboats, LLC | 2,354,799 | — | — | — | 2,354,799 | |||||||||||||||
Loss on disposal of assets | (45,466 | ) | — | 98,256 | — | 52,790 | ||||||||||||||
Total operating costs and expenses | 128,140,266 | — | 105,120,043 | — | 233,260,309 | |||||||||||||||
Operating income | 10,864,894 | — | 17,846,649 | — | 28,711,543 | |||||||||||||||
Other Income (Expense): | ||||||||||||||||||||
Interest income | 258,439 | — | 73,896 | — | 332,335 | |||||||||||||||
Interest expense | (28,510,733 | ) | — | (1,851,449 | ) | — | (30,362,182 | ) | ||||||||||||
Interest expense—debt pushed down from Majestic Holdco(2) | (167,520 | ) | — | — | — | (167,520 | ) | |||||||||||||
Loss on extinguishment of debt | — | — | (3,688,480 | ) | — | (3,688,480 | ) | |||||||||||||
Other non-operating expense | (127,386 | ) | — | — | — | (127,386 | ) | |||||||||||||
Equity in net income of subsidiaries | 12,380,616 | — | — | (12,380,616 | ) | — | ||||||||||||||
Total other expense | (16,166,584 | ) | — | (5,466,033 | ) | (12,380,616 | ) | (34,013,233 | ) | |||||||||||
Net (loss) income | $ | (5,301,690 | ) | $ | — | $ | 12,380,616 | $ | (12,380,616 | ) | $ | (5,301,690 | ) | |||||||
(a) | To eliminate equity in net income of subsidiaries. | |
(1) | Reflects amortization of deferred financing costs related to the issuance of Majestic Holdco’s Discount Notes. | |
(2) | Reflects interest expense on Majestic Holdco’s Discount Notes. |
F-66
Table of Contents
(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
For the Year Ended December 31, 2004
The | ||||||||||||||||||||
The | Majestic Star | |||||||||||||||||||
Majestic Star | Casino Capital | Guarantor | Eliminating | Total | ||||||||||||||||
Casino,LLC | Corp. | Subsidiaries | Entries(a) | Consolidated | ||||||||||||||||
Operating Revenues: | ||||||||||||||||||||
Casino | $ | 149,562,121 | $ | — | $ | 125,206,404 | $ | — | $ | 274,768,525 | ||||||||||
Rooms | — | — | 7,673,287 | — | 7,673,287 | |||||||||||||||
Food and beverage | 1,818,506 | — | 11,643,350 | — | 13,461,856 | |||||||||||||||
Other | 2,892,189 | — | 1,686,872 | — | 4,579,061 | |||||||||||||||
Gross revenues | 154,272,816 | — | 146,209,913 | — | 300,482,729 | |||||||||||||||
Less promotional allowances | 13,214,964 | — | 26,757,058 | — | 39,972,022 | |||||||||||||||
Net operating revenues | 141,057,852 | — | 119,452,855 | — | 260,510,707 | |||||||||||||||
Operating Costs And Expenses: | ||||||||||||||||||||
Casino | 28,769,304 | — | 41,023,318 | — | 69,792,622 | |||||||||||||||
Rooms | — | — | 1,784,333 | — | 1,784,333 | |||||||||||||||
Food and beverage | 2,063,543 | — | 4,060,925 | — | 6,124,468 | |||||||||||||||
Other | 637,209 | — | 1,019,024 | — | 1,656,233 | |||||||||||||||
Gaming taxes | 42,794,831 | — | 16,384,902 | — | 59,179,733 | |||||||||||||||
Advertising and promotion | 8,964,510 | — | 7,305,131 | — | 16,269,641 | |||||||||||||||
General and administrative | 26,697,392 | — | 16,942,198 | — | 43,639,590 | |||||||||||||||
Corporate expense | 3,399,281 | — | — | — | 3,399,281 | |||||||||||||||
Economic incentive tax—City of Gary | 4,494,170 | — | — | — | 4,494,170 | |||||||||||||||
Depreciation and amortization | 7,855,545 | — | 10,130,129 | — | 17,985,674 | |||||||||||||||
Loss on investment in Buffington Harbor Riverboats, LLC | 2,465,612 | — | — | — | 2,465,612 | |||||||||||||||
(Gain) loss on disposal of assets | (78,830 | ) | — | 47,700 | — | (31,130 | ) | |||||||||||||
Total operating costs and expenses | 128,062,567 | — | 98,697,660 | — | 226,760,227 | |||||||||||||||
Operating income | 12,995,285 | — | 20,755,195 | — | 33,750,480 | |||||||||||||||
Other Income (Expense): | ||||||||||||||||||||
Interest income | 93,210 | — | 18,287 | — | 111,497 | |||||||||||||||
Interest expense | (26,717,083 | ) | — | (1,924,611 | ) | — | (28,641,694 | ) | ||||||||||||
Other non-operating expense | (201,757 | ) | — | — | — | (201,757 | ) | |||||||||||||
Equity in net income of subsidiaries | 18,848,871 | — | — | (18,848,871 | ) | — | ||||||||||||||
Total other expense | (7,976,759 | ) | — | (1,906,324 | ) | (18,848,871 | ) | (28,731,954 | ) | |||||||||||
Net income | $ | 5,018,526 | $ | — | $ | 18,848,871 | $ | (18,848,871 | ) | $ | 5,018,526 | |||||||||
(a) | To eliminate equity in net income of subsidiaries. |
F-67
Table of Contents
(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
For the Year Ended December 31, 2003
The | ||||||||||||||||||||||||
The | Majestic Star | |||||||||||||||||||||||
Majestic Star | Casino Capital | Guarantor | Discontinued | Eliminating | Total | |||||||||||||||||||
Casino, LLC | Corp. | Subsidiaries | Operation(a) | Entries(b) | Consolidated | |||||||||||||||||||
Operating Revenues: | ||||||||||||||||||||||||
Casino | $ | 136,568,073 | $ | — | $ | 118,817,746 | $ | — | $ | — | $ | 255,385,819 | ||||||||||||
Rooms | — | — | 7,932,811 | — | — | 7,932,811 | ||||||||||||||||||
Food and beverage | 1,494,793 | — | 11,304,793 | — | — | 12,799,586 | ||||||||||||||||||
Other | 2,277,143 | — | 1,689,274 | — | — | 3,966,417 | ||||||||||||||||||
Gross revenues | 140,340,009 | — | 139,744,624 | — | — | 280,084,633 | ||||||||||||||||||
Less promotional allowances | 11,027,542 | — | 24,101,985 | — | — | 35,129,527 | ||||||||||||||||||
Net operating revenues | 129,312,467 | — | 115,642,639 | — | — | 244,955,106 | ||||||||||||||||||
Operating Costs and Expenses: | ||||||||||||||||||||||||
Casino | 26,952,300 | — | 40,431,325 | — | — | 67,383,625 | ||||||||||||||||||
Rooms | — | — | 2,552,127 | — | — | 2,552,127 | ||||||||||||||||||
Food and beverage | 1,632,438 | — | 3,630,498 | — | — | 5,262,936 | ||||||||||||||||||
Other | — | — | 1,179,893 | — | — | 1,179,893 | ||||||||||||||||||
Gaming taxes | 40,167,015 | — | 15,085,240 | — | — | 55,252,255 | ||||||||||||||||||
Advertising and promotion | 6,837,262 | — | 7,829,023 | — | — | 14,666,285 | ||||||||||||||||||
General and administrative | 24,130,282 | — | 15,522,452 | — | — | 39,652,734 | ||||||||||||||||||
Corporate expense | 2,105,224 | — | 1,350,937 | — | — | 3,456,161 | ||||||||||||||||||
Economic incentive tax—City of Gary | 4,103,010 | — | — | — | — | 4,103,010 | ||||||||||||||||||
Depreciation and amortization | 5,834,078 | — | 11,654,722 | — | — | 17,488,800 | ||||||||||||||||||
Loss on investment in Buffington Harbor Riverboats, LLC | 2,395,436 | — | — | — | — | 2,395,436 | ||||||||||||||||||
Loss (gain) on disposal of assets | 125,919 | — | (8,822 | ) | — | — | 117,097 | |||||||||||||||||
Total operating costs and expenses | 114,282,964 | — | 99,227,395 | — | — | 213,510,359 | ||||||||||||||||||
Operating income | 15,029,503 | — | 16,415,244 | — | — | 31,444,747 | ||||||||||||||||||
Other Income (Expense): | ||||||||||||||||||||||||
Interest income | 62,023 | — | 42,308 | — | — | 104,331 | ||||||||||||||||||
Interest expense | (17,280,924 | ) | — | (14,001,864 | ) | — | — | (31,282,788 | ) | |||||||||||||||
Loss on bond redemption | (10,007,703 | ) | — | (21,952,380 | ) | — | — | (31,960,083 | ) | |||||||||||||||
Other non-operating expense | (156,362 | ) | — | (29,212 | ) | — | — | (185,574 | ) | |||||||||||||||
Equity in net loss of subsidiaries | (31,498,511 | ) | — | (1,972,607 | ) | — | 33,471,118 | — | ||||||||||||||||
Total other expense | (58,881,477 | ) | — | (37,913,755 | ) | — | 33,471,118 | (63,324,114 | ) | |||||||||||||||
Loss from continuing operations | (43,851,974 | ) | — | (21,498,511 | ) | — | 33,471,118 | (31,879,367 | ) | |||||||||||||||
Loss from discontinued operations | — | — | (10,000,000 | ) | (1,972,607 | ) | — | (11,972,607 | ) | |||||||||||||||
Net loss | $ | (43,851,974 | ) | $ | — | $ | (31,498,511 | ) | $ | (1,972,607 | ) | $ | 33,471,118 | $ | (43,851,974 | ) | ||||||||
(a) | Contained within the discontinued operations are the operations of Fitzgeralds Las Vegas, which is not a Guarantor and was spun off to BDI on December 31, 2003. See Note 7, Discontinued Operations. | |
(b) | To eliminate equity in net income (loss) of subsidiaries. |
F-68
Table of Contents
(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
For the Year Ended December 31, 2005
The | ||||||||||||||||||||
The | Majestic Star | |||||||||||||||||||
Majestic Star | Casino Capital | Guarantor | Eliminating | Total | ||||||||||||||||
Casino, LLC | Corp. | Subsidiaries | Entries(a) | Consolidated | ||||||||||||||||
Net Cash (Used In) Provided By Operating Activities:(1) | $ | (15,425,762 | ) | $ | — | $ | 38,265,115 | $ | 5,000,000 | $ | 27,839,353 | |||||||||
Cash Flows From Investing Activities: | ||||||||||||||||||||
Decrease in restricted cash | — | — | 390,008 | — | 390,008 | |||||||||||||||
Acquisition of Trump Indiana, Inc., net of cash acquired | — | — | (231,994,427 | ) | — | (231,994,427 | ) | |||||||||||||
Payment of gaming license transfer fee to State of Indiana | — | — | (2,000,000 | ) | — | (2,000,000 | ) | |||||||||||||
Payoff of City of Gary development agreement | — | — | (3,506,797 | ) | — | (3,506,797 | ) | |||||||||||||
Acquisition of property and equipment | (3,841,488 | ) | — | (7,942,011 | ) | — | (11,783,499 | ) | ||||||||||||
Investment in Buffington Harbor Riverboats, L.L.C. | (174,342 | ) | — | — | — | (174,342 | ) | |||||||||||||
Proceeds from disposal of assets | 102,225 | — | 33,484 | — | 135,709 | |||||||||||||||
Other | — | — | 209,926 | — | 209,926 | |||||||||||||||
Net cash used in investing activities | (3,913,605 | ) | — | (244,809,817 | ) | — | (248,723,422 | ) | ||||||||||||
Cash Flows From Financing Activities: | ||||||||||||||||||||
Payment of costs related to early extinguishment of debt | — | — | (1,053,905 | ) | — | (1,053,905 | ) | |||||||||||||
Issuance costs for the 91/2% senior secured notes | (1,805,572 | ) | — | — | — | (1,805,572 | ) | |||||||||||||
Issuance costs for the 93/4% senior notes | (9,026,094 | ) | — | — | — | (9,026,094 | ) | |||||||||||||
Issuance costs for the $80.0 million secured credit facility | (110,000 | ) | — | — | — | (110,000 | ) | |||||||||||||
Issuance costs for the 121/2% senior discount notes pushed down from Majestic Holdco(2) | (2,823,746 | ) | — | — | — | (2,823,746 | ) | |||||||||||||
Redemption of 11.653% notes | — | — | (16,290,000 | ) | (16,290,000 | ) | ||||||||||||||
Proceeds from issuance of 91/2% notes | 40,000,000 | — | — | — | 40,000,000 | |||||||||||||||
Proceeds from issuance of 93/4% notes | 200,000,000 | — | — | — | 200,000,000 | |||||||||||||||
Proceeds from issuance of 121/2% senior discount notes pushed down from Majestic Holdco(2) | 45,128,815 | — | — | — | 45,128,815 | |||||||||||||||
Proceeds from line of credit | 43,877,024 | — | — | — | 43,877,024 | |||||||||||||||
Repayment of line of credit | (37,629,678 | ) | — | — | — | (37,629,678 | ) | |||||||||||||
Repayment of debt | — | — | (16,974,431 | ) | (16,974,431 | ) | ||||||||||||||
Cash advances (to) from affiliates | (252,857,645 | ) | — | 257,857,645 | (5,000,000 | ) | — | |||||||||||||
Distribution to Barden Development, Inc. | (6,761,824 | ) | — | — | — | (6,761,824 | ) | |||||||||||||
Net cash provided by financing activities | 17,991,280 | — | 223,539,309 | (5,000,000 | ) | 236,530,589 | ||||||||||||||
Net (decrease) increase in cash and cash equivalents | (1,348,087 | ) | — | 16,994,607 | — | 15,646,520 | ||||||||||||||
Cash and cash equivalents, beginning of period | 8,433,545 | — | 8,288,184 | — | 16,721,729 | |||||||||||||||
Cash and cash equivalents, end of period | $ | 7,085,458 | $ | — | $ | 25,282,791 | $ | — | $ | 32,368,249 | ||||||||||
(a) | To eliminate intercompany receivables and payables. | |
(1) | Includes interest expense of $0.2 million related to Majestic Holdco’s Discount Notes. | |
(2) | Reflects the pushdown of Majestic Holdco’s Discount Notes and associated issuance costs pursuant to SEC Staff Accounting Bulletin, Topic 5(J). The Discount Notes are not guaranteed by the Company or the guarantor subsidiaries. |
F-69
Table of Contents
(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
For the Year Ended December 31, 2004
The | ||||||||||||||||||||
The | Majestic Star | |||||||||||||||||||
Majestic Star | Casino Capital | Guarantor | Eliminating | Total | ||||||||||||||||
Casino, LLC | Corp. | Subsidiaries | Entries(a) | Consolidated | ||||||||||||||||
Net Cash (Used In) Provided By Operating Activities: | $ | (5,874,882 | ) | $ | — | $ | 28,034,936 | $ | — | $ | 22,160,054 | |||||||||
Cash Flows From Investing Activities: | ||||||||||||||||||||
Increase in restricted cash | — | — | (1,140,008 | ) | — | (1,140,008 | ) | |||||||||||||
Acquisition of property and equipment | (28,691,842 | ) | — | (7,319,936 | ) | — | (36,011,778 | ) | ||||||||||||
Decrease in prepaid leases and deposits | 12,683 | — | — | — | 12,683 | |||||||||||||||
Investment in Buffington Harbor Riverboats, L.L.C. | (164,289 | ) | — | — | — | (164,289 | ) | |||||||||||||
Proceeds from disposal of assets | 244,580 | — | 95,217 | — | 339,797 | |||||||||||||||
Net cash used in investing activities | (28,598,868 | ) | — | (8,364,727 | ) | — | (36,963,595 | ) | ||||||||||||
Cash Flows From Financing Activities: | ||||||||||||||||||||
Issuance costs for the 91/2% senior secured notes | (229,507 | ) | — | — | — | (229,507 | ) | |||||||||||||
Issuance costs for credit facility | (58,652 | ) | — | — | — | (58,652 | ) | |||||||||||||
Proceeds from line of credit | 45,251,293 | — | — | — | 45,251,293 | |||||||||||||||
Repayment of line of credit | (30,244,786 | ) | — | — | — | (30,244,786 | ) | |||||||||||||
Cash advances (to) from affiliates | 22,510,611 | — | (22,510,611 | ) | — | — | ||||||||||||||
Distribution to Barden Development, Inc. | (5,251,094 | ) | — | — | — | (5,251,094 | ) | |||||||||||||
Net cash provided by (used in) financing activities | 31,977,865 | — | (22,510,611 | ) | — | 9,467,254 | ||||||||||||||
Net decrease in cash and cash equivalents | (2,495,885 | ) | — | (2,840,402 | ) | — | (5,336,287 | ) | ||||||||||||
Cash and cash equivalents, beginning of period | 10,929,430 | — | 11,128,586 | — | 22,058,016 | |||||||||||||||
Cash and cash equivalents, end of period | $ | 8,433,545 | $ | — | $ | 8,288,184 | $ | — | $ | 16,721,729 | ||||||||||
(a) | To eliminate intercompany receivables and payables. |
F-70
Table of Contents
(A Wholly Owned Subsidiary of Majestic Holdco, LLC)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
For the Year Ended December 31, 2003
The Majestic | The Majestic | |||||||||||||||||||||||
Star Casino, | Star Casino | Guarantor | Discontinued | Eliminating | Total | |||||||||||||||||||
LLC | Capital Corp. | Subsidiaries | Operations(a) | Entries(b) | Consolidated | |||||||||||||||||||
Net Cash Provided By Operating Activities: | $ | 19,736,325 | $ | — | $ | 12,240,572 | $ | — | $ | — | $ | 31,976,897 | ||||||||||||
Cash Flows From Investing Activities: | ||||||||||||||||||||||||
Increase in restricted cash | (900,000 | ) | — | (250,000 | ) | — | — | (1,150,000 | ) | |||||||||||||||
Acquisition of property and equipment | (12,204,798 | ) | — | (6,258,192 | ) | — | — | (18,462,990 | ) | |||||||||||||||
Distribution of cash to Barden Development Inc. from spin-off of Barden Nevada Gaming | — | — | — | (4,395,606 | ) | — | (4,395,606 | ) | ||||||||||||||||
Cash paid in excess of historical cost for land purchased from a related party | (559,806 | ) | — | — | — | — | (559,806 | ) | ||||||||||||||||
Decrease in prepaid leases and deposits | 102,417 | — | — | — | — | 102,417 | ||||||||||||||||||
Investment in Buffington Harbor Riverboats, L.L.C. | (295,719 | ) | — | — | — | — | (295,719 | ) | ||||||||||||||||
Proceeds from disposal of assets | 14,750 | — | 62,404 | — | — | 77,154 | ||||||||||||||||||
Net cash used in investing activities | (13,843,156 | ) | — | (6,445,788 | ) | (4,395,606 | ) | — | (24,684,550 | ) | ||||||||||||||
Cash Flows From Financing Activities: | ||||||||||||||||||||||||
Payment of premium on early extinguishment of debt | (7,069,400 | ) | — | (12,192,930 | ) | — | — | (19,262,330 | ) | |||||||||||||||
Payment of senior secured notes issuance costs | (4,420,000 | ) | — | — | — | — | (4,420,000 | ) | ||||||||||||||||
Payment of credit facility issuance cost | (1,583,162 | ) | — | — | — | — | (1,583,162 | ) | ||||||||||||||||
Cash paid for redemption of 11.653% notes | — | — | (135,477,000 | ) | — | — | (135,477,000 | ) | ||||||||||||||||
Cash paid for redemption of 107/8% notes | (130,000,000 | ) | — | — | — | — | (130,000,000 | ) | ||||||||||||||||
Proceeds from issuance of 91/2% senior secured notes | 260,000,000 | — | — | — | — | 260,000,000 | ||||||||||||||||||
Payment of bond redemption by parent | (153,195,427 | ) | — | 153,195,427 | — | — | — | |||||||||||||||||
Proceeds from line of credit | 28,000,000 | — | — | — | — | 28,000,000 | ||||||||||||||||||
Repayment of line of credit | (2,041,507 | ) | — | — | — | — | (2,041,507 | ) | ||||||||||||||||
Repayment of note from related party | 67,000 | — | — | — | — | 67,000 | ||||||||||||||||||
Cash advances (to) from affiliates | 9,100,000 | — | (8,100,000 | ) | — | — | 1,000,000 | |||||||||||||||||
Distribution to Barden Development, Inc. | (2,385,300 | ) | — | (3,679,913 | ) | — | — | (6,065,213 | ) | |||||||||||||||
Net cash used in financing activities | (3,527,796 | ) | — | (6,254,416 | ) | — | — | (9,782,212 | ) | |||||||||||||||
Net increase (decrease) in cash and cash equivalents | 2,365,373 | — | (459,632 | ) | (4,395,606 | ) | — | (2,489,865 | ) | |||||||||||||||
Cash and cash equivalents, beginning of period | 8,564,057 | — | 11,588,218 | 4,395,606 | — | 24,547,881 | ||||||||||||||||||
Cash and cash equivalents, end of period | $ | 10,929,430 | $ | — | $ | 11,128,586 | $ | — | $ | — | $ | 22,058,016 | ||||||||||||
(a) | Contained within Discontinued Operations are the cash flow activities of Fitzgeralds Las Vegas, whose equity interests were spun off to Barden Development, Inc. on December 31, 2003 (see Note 7, Discontinued Operations). | |
(b) | To eliminate inter-company receivables and payables. |
F-71
Table of Contents
(A Wholly Owned Subsidiary of Majestic Holdco, LLC.)
VALUATION AND QUALIFYING ACCOUNTS
For the Years Ended December 31, 2005, 2004, and 2003
Balance at | Charged to | Charged to | Balance at | |||||||||||||||||||||
Beginning | Costs and | Other | End | |||||||||||||||||||||
Descriptions | of Year | Expenses | Accounts | Deductions | of Year | |||||||||||||||||||
Allowance for doubtful accounts: | ||||||||||||||||||||||||
Year ended December 31, 2003 | $ | 372,689 | 205,709 | 4,758 | 324,610 | (a) | $ | 258,546 | ||||||||||||||||
Year ended December 31, 2004 | $ | 258,546 | 576,136 | — | 203,442 | $ | 631,240 | |||||||||||||||||
Year ended December 31, 2005 | $ | 631,240 | 306,673 | — | 269,337 | $ | 668,575 |
(a) | Fitzgeralds Las Vegas’ allowance for doubtful account balances and transactions are not included for the year ended December 31, 2003, since the spin-off of Fitzgeralds Las Vegas to BDI occurred on December 31, 2003. The allowance for doubtful accounts 2003 beginning balance totaling $101,356 for Fitzgeralds Las Vegas was deducted from the above schedule and is included in the $324,610 in the deductions column for the year 2003. |
F-72
Table of Contents
March 30, 2005,
F-73
Table of Contents
December 31, | ||||||||
2004 | 2003 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 9,494,000 | $ | 11,386,000 | ||||
Accounts receivable, net of allowance for doubtful accounts of $117,000 and $91,000, respectively | 739,000 | 970,000 | ||||||
Inventories | 95,000 | 326,000 | ||||||
Surety bond and related interest | 2,190,000 | 2,230,000 | ||||||
Prepaid expenses and other current assets | 980,000 | 1,113,000 | ||||||
Total current assets | 13,498,000 | 16,025,000 | ||||||
Property and equipment: | ||||||||
Building and improvements | 14,634,000 | 14,745,000 | ||||||
Riverboat and improvements | 36,099,000 | 34,240,000 | ||||||
Furniture, fixtures and equipment | 45,992,000 | 46,739,000 | ||||||
96,725,000 | 95,724,000 | |||||||
Less accumulated depreciation and amortization | 44,986,000 | 41,113,000 | ||||||
Net property and equipment | 51,739,000 | 54,611,000 | ||||||
Other assets: | ||||||||
Investment in Buffington Harbor Riverboats, LLC | 27,433,000 | 29,743,000 | ||||||
Prepaid rent to Buffington Harbor Parking Associates | 8,801,000 | 8,801,000 | ||||||
Other assets, net | 213,000 | 4,506,000 | ||||||
Total other assets | 36,447,000 | 43,050,000 | ||||||
Total assets | $ | 101,684,000 | $ | 113,686,000 | ||||
Liabilities and Capital | ||||||||
Current liabilities: | ||||||||
Current maturities of long-term debt | $ | 960,000 | $ | 3,476,000 | ||||
Due to affiliates | (19,014,000 | ) | (4,621,000 | ) | ||||
Accounts payable and accrued expenses | 38,561,000 | 16,163,000 | ||||||
Obligation to City of Gary | 3,705,000 | 4,975,000 | ||||||
Total current liabilities | 24,212,000 | 19,993,000 | ||||||
Long-term debt, net of current maturities | 60,000 | 961,000 | ||||||
Long-term debt, subject to compromise (see Note 1) | 50,558,000 | 50,558,000 | ||||||
Total liabilities | 74,830,000 | 71,512,000 | ||||||
Capital: | ||||||||
Common stock, no par value, 1,500 shares authorized, 100 shares issued and outstanding | 1,000 | 1,000 | ||||||
Additional paid-in capital | 61,801,000 | 61,801,000 | ||||||
Accumulated deficit | (34,948,000 | ) | (19,628,000 | ) | ||||
Total capital | 26,854,000 | 42,174,000 | ||||||
Total liabilities and capital | $ | 101,684,000 | $ | 113,686,000 | ||||
F-74
Table of Contents
Year Ended December 31, | ||||||||||||
2004 | 2003 | 2002 | ||||||||||
Revenues: | ||||||||||||
Gaming | $ | 140,602,000 | $ | 134,851,000 | $ | 128,747,000 | ||||||
Hotel | 3,204,000 | 3,281,000 | 3,331,000 | |||||||||
Food and beverage | 3,150,000 | 3,068,000 | 2,891,000 | |||||||||
Other | 1,962,000 | 1,941,000 | 1,910,000 | |||||||||
Gross revenues | 148,918,000 | 143,141,000 | 136,879,000 | |||||||||
Less promotional allowances | 11,250,000 | 14,736,000 | 12,877,000 | |||||||||
Net revenues | 137,668,000 | 128,405,000 | 124,002,000 | |||||||||
Cost and expenses: | ||||||||||||
Gaming | 72,443,000 | 68,335,000 | 63,038,000 | |||||||||
Hotel | 2,023,000 | 1,932,000 | 1,705,000 | |||||||||
Food and beverage | 4,718,000 | 4,537,000 | 4,421,000 | |||||||||
General and administrative | 31,547,000 | 36,577,000 | 28,184,000 | |||||||||
Reorganization expense (see Note 1) | 2,132,000 | — | — | |||||||||
Depreciation and amortization | 7,614,000 | 7,288,000 | 6,250,000 | |||||||||
120,477,000 | 118,669,000 | 103,598,000 | ||||||||||
Income from operations | 17,191,000 | 9,736,000 | 20,404,000 | |||||||||
Nonoperating income (expense): | ||||||||||||
Interest income | (14,000 | ) | 429,000 | 273,000 | ||||||||
Interest expense | (8,763,000 | ) | (7,011,000 | ) | (3,951,000 | ) | ||||||
Loss on debt retirement | — | (1,820,000 | ) | — | ||||||||
Other nonoperating income (expense) | 573,000 | (20,000 | ) | 1,219,000 | ||||||||
Nonoperating expense, net | (8,204,000 | ) | (8,422,000 | ) | (2,459,000 | ) | ||||||
Income before equity in loss from Buffington Harbor Riverboats, LLC, and income taxes | 8,987,000 | 1,314,000 | 17,945,000 | |||||||||
Equity in loss from Buffington Harbor Riverboats, LLC | (2,449,000 | ) | (2,396,000 | ) | (2,448,000 | ) | ||||||
Provision for income taxes | (21,858,000 | ) | — | — | ||||||||
Net income (loss) | $ | (15,320,000 | ) | $ | (1,082,000 | ) | $ | 15,497,000 | ||||
F-75
Table of Contents
Accumulated | ||||||||||||||||||||||||
Shares of | Additional | Other | ||||||||||||||||||||||
Common | Paid-In | Accumulated | Comprehensive | |||||||||||||||||||||
Stock | Amount | Capital | Deficit | Loss | Total | |||||||||||||||||||
Balance, December 31, 2001 | 100 | $ | 1,000 | $ | 61,801,000 | $ | (34,043,000 | ) | $ | (372,000 | ) | $ | 27,387,000 | |||||||||||
Comprehensive income: | ||||||||||||||||||||||||
Net Income | — | — | — | 15,497,000 | — | 15,497,000 | ||||||||||||||||||
Adjustment for interest rate swap | — | — | — | — | (566,000 | ) | (566,000 | ) | ||||||||||||||||
Total Comprehensive income | 14,931,000 | |||||||||||||||||||||||
Balance, December 31, 2002 | 100 | 1,000 | 61,801,000 | (18,546,000 | ) | (938,000 | ) | 42,318,000 | ||||||||||||||||
Comprehensive loss: | ||||||||||||||||||||||||
Net loss | — | — | — | (1,082,000 | ) | — | (1,082,000 | ) | ||||||||||||||||
Adjustment for interest rate swap | — | — | — | — | 938,000 | 938,000 | ||||||||||||||||||
Total comprehensive loss | (144,000 | ) | ||||||||||||||||||||||
Balance, December 31, 2003 | 100 | 1,000 | 61,801,000 | (19,628,000 | ) | — | 42,174,000 | |||||||||||||||||
Net loss | — | — | — | (15,320,000 | ) | — | (15,320,000 | ) | ||||||||||||||||
Balance, December 31, 2004 | 100 | $ | 1,000 | $ | 61,801,000 | $ | (34,948,000 | ) | $ | — | $ | 26,854,000 | ||||||||||||
F-76
Table of Contents
Year Ended December 31, | ||||||||||||
2004 | 2003 | 2002 | ||||||||||
Cash flows from operating activities | ||||||||||||
Net income (loss) | $ | (15,320,000 | ) | $ | (1,082,000 | ) | $ | 15,497,000 | ||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||||||
Depreciation and amortization | 7,614,000 | 7,288,000 | 6,250,000 | |||||||||
Amortization of loan costs | 340,000 | 409,000 | 450,000 | |||||||||
Provision for doubtful accounts | 383,000 | 189,000 | 203,000 | |||||||||
Equity in loss from Buffington Harbor, LLC | 2,449,000 | 2,396,000 | 2,448,000 | |||||||||
Reorganization expense | 1,937,000 | 1,820,000 | — | |||||||||
Changes in operating assets and liabilities: | ||||||||||||
Decrease (increase) in surety bond interest receivable | 40,000 | (412,000 | ) | 1,201,000 | ||||||||
Increase in accounts receivable | (153,000 | ) | (50,000 | ) | (162,000 | ) | ||||||
Decrease (increase) in inventories | 231,000 | 6,000 | (95,000 | ) | ||||||||
Decrease (increase) in prepaid expenses and other current assets | 133,000 | (82,000 | ) | (436,000 | ) | |||||||
Decrease in other assets | 193,000 | 297,000 | 3,444,000 | |||||||||
(Decrease) increase in accounts payable and accrued expenses | (1,795,000 | ) | 6,647,000 | (2,813,000 | ) | |||||||
Increase in state income tax payable | 21,858,000 | — | — | |||||||||
(Decrease) in due to affiliates | (12,056,000 | ) | (1,808,000 | ) | (10,151,000 | ) | ||||||
(Decrease) in obligation to City of Gary | (1,271,000 | ) | — | (4,793,000 | ) | |||||||
Net cash provided by operating activities | 4,583,000 | 15,618,000 | 11,043,000 | |||||||||
Cash flows from investing activities | ||||||||||||
Investment in Buffington Harbor Riverboats, LLC | (139,000 | ) | (297,000 | ) | (401,000 | ) | ||||||
Purchase of property and equipment | (2,831,000 | ) | (1,780,000 | ) | (9,910,000 | ) | ||||||
Net cash used in investing activities | (2,970,000 | ) | (2,077,000 | ) | (10,311,000 | ) | ||||||
Cash flows from financing activities | ||||||||||||
Debt issuance costs | — | (2,453,000 | ) | (208,000 | ) | |||||||
Repayments of debt | (3,505,000 | ) | (25,259,000 | ) | (7,535,000 | ) | ||||||
Proceeds from borrowing | — | 17,660,000 | 3,045,000 | |||||||||
Net cash used in financing activities | (3,505,000 | ) | (10,052,000 | ) | (4,698,000 | ) | ||||||
Net increase (decrease) in cash and cash equivalents | (1,892,000 | ) | 3,489,000 | 3,966,000 | ||||||||
Cash and cash equivalents, beginning of year | 11,386,000 | 7,897,000 | 11,863,000 | |||||||||
Cash and cash equivalents, end of year | $ | 9,494,000 | $ | 11,386,000 | $ | 7,897,000 | ||||||
F-77
Table of Contents
1. | Organization and Operations |
F-78
Table of Contents
1. | Organization and Operations—(continued) |
F-79
Table of Contents
1. | Organization and Operations—(continued) |
• | a services agreement that would have a three-year rolling term, pay Mr. Trump $2.0 million per year, plus a discretionary annual bonus, reimburse Mr. Trump for certain travel and customary administrative expenses incurred by Mr. Trump in his capacity as chairman, and terminate his existing executive agreement; | |
• | an amended and restated trademark license agreement, which would grant THCR Holdings a perpetual, exclusive, royalty-free license to use Mr. Trump’s name and likeness in connection with the Debtors’ casino and gaming activities, subject to certain terms and conditions, and terminate Mr. Trump’s existing trademark license agreement with THCR; | |
• | a three-year right of first offer agreement, pursuant to which the Trump Organization LLC, Mr. Trump’s controlled affiliate, would be granted a three-year right of first offer to serve as project manager, construction managerand/or general contractor with respect to construction and development projects for casinos, casino hotels and related lodging to be performed by third parties on the Debtors’ existing and future properties, subject to certain terms and conditions; | |
• | a voting agreement that would determine the composition of the recapitalized Company’s board of directors for a certain period, subject to certain terms and conditions and applicable law; and | |
• | an amended and restated partnership agreement of THCR Holdings, which would, among other things, require the affirmative vote of Mr. Trump with respect to the sale or transfer of one or more of THCR’s current properties; provided, however, that THCR could sell or transfer such properties without Mr. Trump’s consent if THCR Holdings indemnified Mr. Trump up to an aggregate of $100 million for the U.S. federal income tax consequences to Mr. Trump associated with such sale or transfer. |
F-80
Table of Contents
1. | Organization and Operations—(continued) |
F-81
Table of Contents
1. | Organization and Operations—(continued) |
TCH Notes | $ | 50,558,000 |
F-82
Table of Contents
1. | Organization and Operations—(continued) |
Write-off of deferred financing costs | $ | 1,291,000 | ||
Accretion of unamortized debt discount | 645,000 | |||
Professional fees and expenses | 196,000 | |||
$ | 2,132,000 | |||
2. | Summary of Significant Accounting Policies |
F-83
Table of Contents
2. | Summary of Significant Accounting Policies—(continued) |
Buildings | 40 years | |||
Riverboat | 30 years | |||
Furniture, fixtures and equipment | 3-7 years |
F-84
Table of Contents
2. | Summary of Significant Accounting Policies—(continued) |
December 31 | ||||||||
2004 | 2003 | |||||||
Cash | $ | 311,000 | $ | 83,000 | ||||
Total current assets | 2,545,000 | 5,096,000 | ||||||
Property, plant, and equipment, net | 57,199,000 | 61,882,000 | ||||||
Total assets | 59,827,000 | 67,079,000 | ||||||
Total current liabilities | 4,657,000 | 7,223,000 | ||||||
Total liabilities | 4,962,000 | 7,612,000 | ||||||
Total members’ equity | 54,865,000 | 59,467,000 |
Year Ended December 31 | ||||||||||||
2004 | 2003 | 2002 | ||||||||||
Gross revenues | $ | 11,145,000 | $ | 18,435,000 | $ | 16,095,000 | ||||||
Operating loss | (4,899,000 | ) | (4,785,000 | ) | (4,795,000 | ) | ||||||
Net loss | (4,931,000 | ) | (4,791,000 | ) | (4,849,000 | ) |
F-85
Table of Contents
2. | Summary of Significant Accounting Policies—(continued) |
Year Ended December 31 | ||||||||||||
2004 | 2003 | 2002 | ||||||||||
Cash paid during the year for interest | $ | 8,423,000 | $ | 6,553,000 | $ | 1,909,000 | ||||||
Supplemental disclosure of noncash activities: | ||||||||||||
Fixed assets purchased under capital leases | $ | 89,000 | $ | 115,000 | $ | 107,000 | ||||||
F-86
Table of Contents
2. | Summary of Significant Accounting Policies—(continued) |
3. | Accounts Payable and Accrued Expenses |
2004 | 2003 | |||||||
Trade accounts payable | $ | 1,527,000 | $ | 1,758,000 | ||||
Accrued compensation and related expenses | 1,571,000 | 1,076,000 | ||||||
Accrued progressive jackpot liability | 308,000 | 532,000 | ||||||
Accrued property taxes, income taxes and other taxes payable | 31,660,000 | 11,260,000 | ||||||
Other | 3,495,000 | 1,537,000 | ||||||
$ | 38,561,000 | $ | 16,163,000 | |||||
F-87
Table of Contents
3. | Accounts Payable and Accrued Expenses—(continued) |
4. | Long-Term Debt |
2004 | 2003 | |||||||
Notes payable to Trump Casino Holdings, L.L.C., interest rate of 115/8% and 175/8%, due 2010(a) | $ | 50,558,000 | $ | 50,558,000 | ||||
Note payable—riverboat and hotel | ||||||||
Note payable | — | 580,000 | ||||||
Note payable(b) | 851,000 | 3,575,000 | ||||||
Capitalized leases(c) | 169,000 | 282,000 | ||||||
51,578,000 | 54,995,000 | |||||||
Less current maturities | (960,000 | ) | (3,476,000 | ) | ||||
Less Long-term debt subject to compromise | (50,558,000 | ) | (50,558,000 | ) | ||||
$ | 60,000 | $ | 961,000 | |||||
(a) | In March 2003, TCH and TCF consummated a private placement of two issues of mortgage notes consisting of: (i) $425,000,000 principal amount of TCH First Priority Notes due March 15, 2010, bearing interest at a rate of 11.625% per year payable in cash, sold at a price of 94.832% of their face amount for an effective yield of 12.75%, and (ii) $50,000,000 principal amount of TCH Second Priority Notes due September 15, 2010, bearing interest at a rate of 11.625% per year payable in cash, plus 6.0% through the issuance ofpayable-in-kind notes. As of December 31, 2004, the TCH Notes are technically in default based upon the matters described in Note 1. In order to record its debt instruments at the amount of the claim expected to be allowed by the Bankruptcy Court in accordance withSOP 90-7, the Company wrote off as reorganization expense the unamortized debt discount and deferred financing costs associated with the TCH Notes to record the debt at par value. Additionally, this debt has been classified as long- term debt subject to compromise on the December 31, 2004 balance sheet pursuant toSOP 90-7. In connection with the TCH Notes offering, Donald J. Trump purchased in a concurrent private offering, $15.0 million aggregate principal amount of additional TCH Second Priority Notes at the same purchase price at which the initial purchasers purchased such notes. |
F-88
Table of Contents
4. | Long-Term Debt—(continued) |
(b) | On May 30, 2003, Trump Indiana, Inc. entered into a loan agreement with a bank for $5,000,000. Proceeds from the loan were used to purchase slot equipment which secures the loan. The loan bears an interest rate of 4.25% and the loan amortizes over a 24 month period. | |
(c) | Trump Indiana, Inc. entered into various capital lease obligations with interest rates ranging from 3.821% to 14.98%. These leases are due at various dates between 2004 and 2007 and are secured by underlying real property or equipment. |
2005 | $ | 115,000 | ||
2006 | 51,000 | |||
2007 | 11,000 | |||
177,000 | ||||
Less amount representing interest | 8,000 | |||
Present value of minimum lease payments | $ | 169,000 | ||
5. | Operating Leases |
2005 | $ | 3,898,000 | ||
2006 | 3,491,000 | |||
2007 | 3,422,000 | |||
2008 | 3,357,000 | |||
2009 | 3,291,000 | |||
Thereafter | 8,724,000 | |||
$ | 26,183,000 | |||
F-89
Table of Contents
5. | Operating Leases—(continued) |
6. | Income Taxes |
F-90
Table of Contents
6. | Income Taxes—(continued) |
2004 | 2003 | |||||||
Deferred tax assets: | ||||||||
Net operating losses | $ | 11,407,000 | $ | 9,382,000 | ||||
Amortization of license costs | 7,559,000 | 8,040,000 | ||||||
Other | 7,067,000 | 1,601,000 | ||||||
Total deferred tax assets | 26,033,000 | 19,023,000 | ||||||
Deferred tax liabilities: | ||||||||
Depreciation | (9,569,000 | ) | (9,212,000 | ) | ||||
Other | (999,000 | ) | (999,000 | ) | ||||
Total deferred tax liabilities | (10,568,000 | ) | (10,211,000 | ) | ||||
Net deferred tax assets | 15,465,000 | 8,812,000 | ||||||
Valuation allowance | (15,465,000 | ) | (8,812,000 | ) | ||||
Net deferred taxes | $ | — | $ | — | ||||
7. | Commitments and Contingencies |
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7. | Commitments and Contingencies—(continued) |
Gaming Receipts | Tax % | |||
$0 — $25 million | 15% | |||
$25 — $50 million | 20% | |||
$50 — $75 million | 25% | |||
$75 — $150 million | 30% | |||
Over $150 million | 35% |
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7. | Commitments and Contingencies—(continued) |
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7. | Commitments and Contingencies—(continued) |
8. | Retirement Savings Plan |
9. | Transactions with Affiliates |
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9. | Transactions with Affiliates—(continued) |
10. | Consolidated Financial Statements of Debtors in Possession |
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DEBTORS IN POSSESSION
CONSOLIDATED STATEMENT OF OPERATIONS
Period From November 21, 2004 to December 31, 2004
2004 | ||||
(In thousands) | ||||
Revenues | $ | 13,106 | ||
Operating expenses | (9,669 | ) | ||
Depreciation and amortization | (792 | ) | ||
Reorganization expense | (2,132 | ) | ||
Income from operations | 513 | |||
Interest income | 8 | |||
Interest expense | (947 | ) | ||
Other | (616 | ) | ||
Loss before equity in loss from Buffington Harbor L.L.C. and provision for income tax | (1,042 | ) | ||
Equity in loss from Buffington Harbor, L.L.C. | (264 | ) | ||
Loss before income taxes | (1,306 | ) | ||
Provision for income taxes | (400 | ) | ||
Net loss | $ | (1,706 | ) | |
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DEBTORS IN POSSESSION
CONSOLIDATED STATEMENT OF CASH FLOWS
Period From November 21, 2004 to December 31, 2004
2004 | ||||
(In thousands) | ||||
Cash flows from operating activities | ||||
Net loss from continuing operations | $ | (1,706 | ) | |
Depreciation and amortization | 792 | |||
Reorganization expense | 2,132 | |||
Equity in loss in Buffington Harbor | 264 | |||
Changes in operating assets and liabilities: | ||||
(Increase) decrease in receivables | (142 | ) | ||
(Increase) decrease in inventories | 91 | |||
(Increase) decrease in other current assets | (6 | ) | ||
(Increase) decrease in other assets | (403 | ) | ||
Increase (decrease) in accounts payable, accrued expenses, and other current liabilities | 144 | |||
Increase (decrease) in other long term liabilities | (2 | ) | ||
Net cash flows provided by operating activities | 1,164 | |||
Cash flows from investing activities | ||||
Purchases of property and equipment, net | (597 | ) | ||
Net cash flows used in investing activities | (597 | ) | ||
Cash flows from financing activities | ||||
Debt payments | (314 | ) | ||
Net cash flows used in financing activities | (314 | ) | ||
Net increase in cash and cash equivalents | 253 | |||
Cash and cash equivalents at beginning of period | 9,241 | |||
Cash and cash equivalents at end of period | $ | 9,494 | ||
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F-99
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December 31, | ||||||||
2004 | 2003 | |||||||
ASSETS | ||||||||
Current Assets: | ||||||||
Cash | $ | 311,052 | $ | 82,639 | ||||
Trade Receivables | 32,723 | 56,626 | ||||||
Inventory | 95,707 | 186,768 | ||||||
Prepaid expenses and other current assets | 261,621 | 241,824 | ||||||
Due from members | 1,843,853 | 4,527,999 | ||||||
Total current assets | 2,544,956 | 5,095,856 | ||||||
Property, plant, and equipment, net | 57,199,307 | 61,881,975 | ||||||
Other assets | 82,359 | 101,248 | ||||||
Total assets | $ | 59,826,622 | $ | 67,079,079 | ||||
LIABILITIES AND MEMBERS’ CAPITAL | ||||||||
Current liabilities: | ||||||||
Current portion of capital lease obligations | $ | 83,788 | $ | 71,152 | ||||
Account payable | 838,069 | 1,414,654 | ||||||
Accrued expense | 443,772 | 390,012 | ||||||
Accrued property taxes | 3,291,748 | 5,347,584 | ||||||
Total current liabilities | 4,657,377 | 7,223,402 | ||||||
Capital lease obligations, net of current portion | 304,704 | 388,491 | ||||||
Members’ capital | 54,864,541 | 59,467,186 | ||||||
Total liabilities and members’ capital | $ | 59,826,622 | $ | 67,079,079 | ||||
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Year Ended December 31, | ||||||||||||
2004 | 2003 | 2002 | ||||||||||
Revenues: | ||||||||||||
Food and beverage | $ | — | $ | 757,381 | $ | 1,343,800 | ||||||
Related party | 10,500,908 | 16,827,528 | 13,988,248 | |||||||||
Other | 644,549 | 849,718 | 763,317 | |||||||||
Net revenues | 11,145,457 | 18,434,627 | 16,095,365 | |||||||||
Costs and expenses: | ||||||||||||
Food and beverage | 1,161,267 | 1,732,499 | 2,646,737 | |||||||||
General and administrative | 9,805,323 | 16,495,832 | 13,026,312 | |||||||||
Depreciation | 4,897,362 | 4,788,031 | 4,848,501 | |||||||||
Other | 180,931 | 203,724 | 368,375 | |||||||||
16,044,883 | 23,220,086 | 20,889,925 | ||||||||||
Loss from operations | (4,899,426 | ) | (4,785,459 | ) | (4,794,560 | ) | ||||||
Interest (expense) income, net | (31,799 | ) | (5,409 | ) | (54,303 | ) | ||||||
Net loss | $ | (4,931,225 | ) | $ | (4,790,868 | ) | $ | (4,848,863 | ) | |||
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Member | Retained | |||||||||||
Contributions | Deficit | Total | ||||||||||
Balance, December 31, 2001 | $ | 101,316,444 | $ | (33,518,795 | ) | $ | 67,797,649 | |||||
Capital contributions made by Trump Indiana, Inc. | 358,918 | — | 358,918 | |||||||||
Capital contributions made by The Majestic Star Casino, LLC | 358,918 | — | 358,918 | |||||||||
Net loss | — | (4,848,863 | ) | (4,848,863 | ) | |||||||
Balance, December 31, 2002 | 102,034,280 | (38,367,658 | ) | 63,666,622 | ||||||||
Capital contributions made by Trump Indiana, Inc. | 295,716 | — | 295,716 | |||||||||
Capital contributions made by The Majestic Star Casino, LLC | 295,716 | — | 295,716 | |||||||||
Net loss | — | (4,790,868 | ) | (4,790,868 | ) | |||||||
Balance, December 31, 2003 | 102,625,712 | (43,158,526 | ) | 59,467,186 | ||||||||
Capital contributions made by Trump Indiana, Inc. | 164,290 | — | 164,290 | |||||||||
Capital contributions made by The Majestic Star Casino, LLC | 164,290 | — | 164,290 | |||||||||
Net loss | — | (4,931,225 | ) | (4,931,225 | ) | |||||||
Balance, December 31, 2004 | $ | 102,954,292 | $ | (48,089,751 | ) | $ | 54,864,541 | |||||
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Years Ended December 31, | ||||||||||||
2004 | 2003 | 2002 | ||||||||||
Cash Flows From Operating Activities: | ||||||||||||
Net loss | $ | (4,931,225 | ) | $ | (4,790,868 | ) | $ | (4,848,863 | ) | |||
Adjustments to reconcile net loss to net cash flows provided by operating activities: | ||||||||||||
Depreciation | 4,897,362 | 4,788,031 | 4,848,501 | |||||||||
Loss on disposal of fixed assets | 32,476 | — | 10,861 | |||||||||
Changes in operating assets and liabilities: | ||||||||||||
Decrease in trade receivables | 23,903 | 36,161 | (66,773 | ) | ||||||||
Decrease (increase) in inventory | 91,061 | (5,476 | ) | 129,056 | ||||||||
Increase in prepaid expenses and other current assets | (19,797 | ) | (124,873 | ) | 11,042 | |||||||
Decrease in other assets | 18,889 | 7,166 | 3,064 | |||||||||
(Decrease) increase in accounts payable | (576,585 | ) | 701,778 | 277,551 | ||||||||
(Decrease) increase in accrued expenses and accrued property taxes | (2,002,076 | ) | 4,302,270 | (316,779 | ) | |||||||
Decrease (increase) in due from members | 2,684,146 | (4,879,166 | ) | (207,302 | ) | |||||||
Net cash flows provided by operating activities | 218,154 | 35,023 | (159,642 | ) | ||||||||
Cash Flows From Investing Activities: | ||||||||||||
Purchases of property, plant, and equipment, net | (247,170 | ) | (594,321 | ) | (825,335 | ) | ||||||
Cash Flows From Financing Activities: | ||||||||||||
Capital contributions, net | 328,580 | 591,432 | 717,836 | |||||||||
Principal payments under capital lease obligations | (71,151 | ) | — | — | ||||||||
Net cash flows provided by financing activities | 257,429 | 591,432 | 717,836 | |||||||||
Net increase in cash and cash equivalents | 228,413 | 32,134 | (267,141 | ) | ||||||||
Cash at Beginning of Year | 82,639 | 50,505 | 317,646 | |||||||||
Cash at End of Year | $ | 311,052 | $ | 82,639 | $ | 50,505 | ||||||
Supplemental Disclosure of Noncash Information: | ||||||||||||
Equipment obtained through capital lease | $ | — | $ | 459,643 | $ | — | ||||||
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1. | Organization and Operations |
2. | Summary of Significant Accounting Policies |
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2. | Summary of Significant Accounting Policies—(continued) |
Land improvements | 15 years | |||
Building | 40 years | |||
Building improvements | 5-10 years | |||
Harbor improvements | 10-15 years | |||
Furniture, fixtures, and equipment | 5 years |
3. | Property, Plant, and Equipment |
2004 | 2003 | |||||||
Land and land improvements | $ | 34,500,080 | $ | 34,500,080 | ||||
Building and improvements | 41,346,655 | 41,205,469 | ||||||
Harbor improvements | 19,573,497 | 19,564,697 | ||||||
Furniture, fixtures, and equipment | 8,260,014 | 8,625,177 | ||||||
Construction-in-progress | 75,919 | 50,476 | ||||||
103,756,165 | 103,945,899 | |||||||
Less accumulated depreciation | 46,556,858 | 42,063,924 | ||||||
Total property, plant, and equipment, net | $ | 57,199,307 | $ | 61,881,975 | ||||
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4. | Leases |
2005 | $ | 111,839 | ||
2006 | 111,839 | |||
2007 | 111,839 | |||
2008 | 111,839 | |||
2009 | 9,320 | |||
456,676 | ||||
Amounts representing interest | (68,184 | ) | ||
388,492 | ||||
Current portion | (83,788 | ) | ||
Long-term portion | $ | 304,704 | ||
5. | Employee Benefit Plan |
6. | Commitments and Contingencies |
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6. | Commitments and Contingencies—(continued) |
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Table of Contents
Item 20. | Indemnification of Directors and Officers |
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Item 21. | Exhibits and Financial Statement Schedules |
Exhibit | ||||
No. | Description of Exhibit | |||
1 | .1** | Purchase Agreement, dated as of December 16, 2005, by and among The Majestic Star Casino, LLC, The Majestic Star Casino Capital Corp., and Jefferies & Company, Inc., filed as Exhibit 10.1 to the Company’s Current Report onForm 8-K dated December 28, 2005, and incorporated herein by reference | ||
1 | .2** | Purchase Agreement, dated as of December 16, 2005, by and among The Majestic Star Casino, LLC, Majestic Star Casino Capital Corp. II, and Jeffries & Company, Inc., filed as Exhibit 10.2 to the Company’s Current Report onForm 8-K dated December 28, 2005, and incorporated herein by reference | ||
2 | .1** | Purchase and Sale Agreement dated as of November 2, 2000, by and among Majestic Investor, LLC, Fitzgeralds Las Vegas, Inc., 101 Main Street Limited Liability Company, Fitzgeralds Mississippi, Inc., Fitzgeralds Gaming Corporation and certain affiliates of the foregoing parties, filed as Exhibit 2.1 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2000, and incorporated herein by reference | ||
2 | .2** | First Amendment to Purchase and Sale Agreement dated as of December 4, 2000 by and among Majestic Investor, LLC, Fitzgeralds Las Vegas, Inc., 101 Main Street Limited Liability Company, Fitzgeralds Mississippi, Inc., Fitzgeralds Gaming Corporation and certain affiliates of the foregoing parties, filed as Exhibit 2.1 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2000, and incorporated herein by reference | ||
2 | .3** | Second Amendment to Purchase and Sale Agreement dated as of November 1, 2001, by and among Majestic Investor Holdings, LLC, Majestic Investor, LLC, Barden Nevada Gaming, LLC, Garden Mississippi Gaming, LLC, Barden Colorado Gaming, LLC, Fitzgeralds Las Vegas, Inc., 101 Main Street Limited Liability Company, Fitzgeralds Mississippi, Inc. and Fitzgeralds Gaming corporation, filed as Exhibit 2.2 to the Company’s Current Report onForm 8-K dated December 28, 2005, and incorporated herein by reference | ||
2 | .4** | Assignment of Interest by Barden Development, Inc. and Majestic Investor Holdings, LLC dated as of December 31, 2003, filed as Exhibit 2.1 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2003, and incorporated herein by reference | ||
2 | .5** | Asset Purchase Agreement, dated July 12, 2004, by and between Legends Gaming, LLC and Barden Colorado Gaming, LLC, filed as Exhibit 2.1 to the Company’s Current Report onForm 8-K dated July 12, 2004, and incorporated herein by reference | ||
2 | .6** | Amendment No. 1, dated February 1, 2005, to Asset Purchase Agreement, dated July 12, 2004, by and between Legends Gaming LLC and Barden Colorado Gaming, LLC, filed as Exhibit 2.2.1 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2004, and incorporated herein by reference | ||
2 | .7** | Stock Purchase Agreement with respect to the stock of Trump Indiana, Inc. (now known as The Majestic Star II, Inc.), dated as of November 3, 2005, by and among The Majestic Star Casino, LLC and Trump Entertainment Resorts Holdings, L.P., filed as Exhibit 2.1 to the Company’s Current Report onForm 8-K dated November 9, 2005, and incorporated herein by reference | ||
3 | .1** | Amended and Restated Articles of Organization of The Majestic Star Casino, LLC, filed as Exhibit 3.1 to the Company’s Registration Statement,No. 333-06489, and incorporated herein by reference | ||
3 | .2** | Third Amended and Restated Operating Agreement of The Majestic Star Casino, LLC dated as of March 29, 1996, filed as Exhibit 3.2 to the Company’s Registration Statement,No. 333-06489, and incorporated herein by reference | ||
3 | .3** | First Amendment of Third Amended and Restated Operating Agreement of The Majestic Star Casino, LLC, dated as of June 18, 1999, filed as Exhibit 3.3 to the Company’s Registration Statement,No. 333-085089, and incorporated herein by reference | ||
3 | .4** | Articles of Incorporation of The Majestic Star Casino Capital Corp., filed as Exhibit 3.4 to the Company’s Registration Statement, No.333-085089, and incorporated herein by reference |
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Exhibit | ||||
No. | Description of Exhibit | |||
3 | .5** | Bylaws of The Majestic Star Casino Capital Corp., filed as Exhibit 3.5 to the Company’s Registration Statement,No. 333-085089, and incorporated herein by reference | ||
3 | .6** | Articles of Incorporation of Majestic Star Casino Capital Corp. II | ||
3 | .7** | Bylaws of Majestic Star Casino Capital Corp. II | ||
3 | .8** | Amendment to Bylaws of Majestic Star Casino Capital Corp. II | ||
3 | .9** | Amended and Restated Articles of Organization of Barden Colorado Gaming, LLC, filed as Exhibit 3.10 to the Company’s Registration Statement,No. 333-110993, and incorporated herein by reference | ||
3 | .10** | Operating Agreement of Barden Colorado Gaming, LLC, filed as Exhibit 3.11 to the Company’s Registration Statement,No. 333-110993, and incorporated herein by reference | ||
3 | .11** | Certificate of Formation of Barden Mississippi Gaming, LLC, filed as Exhibit 3.12 to the Company’s Registration Statement,No. 333-110993, and incorporated herein by reference | ||
3 | .12** | Certificate of Amendment to Certificate of Formation of Barden Mississippi Gaming, LLC, filed as Exhibit 3.13 to the Company’s Registration Statement,No. 333-110993, and incorporated herein by reference | ||
3 | .13** | Certificate of Amendment to Certificate of Formation of Barden Mississippi Gaming, LLC, filed as Exhibit 3.14 to the Company’s Registration Statement,No. 333-110993, and incorporated herein by reference | ||
3 | .14** | Amended and Restated Operating Agreement of Barden Mississippi Gaming, LLC, filed as Exhibit 3.15 to the Company’s Registration Statement, No.333-110993, and incorporated herein by reference | ||
3 | .15** | Restated Certificate of Incorporation of The Majestic Star Casino II, Inc. | ||
3 | .16** | Bylaws of The Majestic Star Casino II, Inc. | ||
3 | .17** | Certificate of Formation of Buffington Harbor Riverboats, L.L.C. | ||
3 | .18** | Certificate of Formation of Buffington Harbor Parking Associates, LLC | ||
4 | .1** | Indenture, dated as of October 7, 2003, among The Majestic Star Casino, LLC and Majestic Star Casino Capital Corp., as issuers, and the subsidiary guarantors, as subsidiary guarantors and The Bank of New York, as trustee, filed as Exhibit 4.1 to the Company’s Registration Statement,No. 333-110993, and incorporated herein by reference | ||
4 | .2** | Supplemental Indenture, dated as of December 21, 2005, among The Majestic Star Casino, LLC and Majestic Star Casino Capital Corp., as issuers, and the subsidiary guarantors, as subsidiary guarantors and The Bank of New York Trust Company, N.A., as trustee, filed as Exhibit 10.3 to the Company’s Current Report onForm 8-K dated December 28, 2005, and incorporated herein by reference | ||
4 | .3** | Supplemental Indenture, dated as of December 21, 2005, among The Majestic Star Casino, LLC and Majestic Star Casino Capital Corp., as issuers, and the existing and new subsidiary guarantors, as subsidiary guarantors and The Bank of New York Trust Company, N.A., as trustee, filed as Exhibit 10.4 to the Company’s Current Report onForm 8-K dated December 28, 2005, and incorporated herein by reference | ||
4 | .4** | Indenture, dated as of December 21, 2005, among The Majestic Star Casino, LLC and Majestic Star Casino Capital Corp. II, as issuers, and the subsidiary guarantors, as subsidiary guarantors and The Bank of New York Trust Company, N.A., as trustee, filed as Exhibit 10.5 to the Company’s Current Report onForm 8-K dated December 28, 2005, and incorporated herein by reference | ||
4 | .5** | Registration Rights Agreement, dated as of December 21, 2005, among The Majestic Star Casino, LLC, The Majestic Star Casino Capital Corp. and Jefferies & Company, Inc, with respect to the senior secured notes, filed as Exhibit 10.6 to the Company’s Current Report onForm 8-K dated December 28, 2005, and incorporated herein by reference | ||
4 | .6** | Registration Rights Agreement, dated as of December 21, 2005, among The Majestic Star Casino, LLC, Majestic Star Casino Capital Corp. II and Jefferies & Company, Inc, with respect to the senior notes, filed as Exhibit 10.7 to the Company’s Current Report onForm 8-K dated December 28, 2005, and incorporated herein by reference |
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Exhibit | ||||
No. | Description of Exhibit | |||
4 | .7** | Intercreditor Agreement, dated as of October 7, 2003, between The Bank of New York and Wells Fargo Foothill, Inc., filed as Exhibit 4.6 to the Company’s Registration Statement,No. 333-110993, and incorporated herein by reference | ||
4 | .8** | First Amendment to Intercreditor and Lien Subordination Agreement, dated as of December 21, 2005, by and among The Majestic Star Casino, LLC, The Bank of New York Trust Company N.A., Inc. and Wells Fargo Foothill, Inc., filed as Exhibit 4.6 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2005, and incorporated herein by reference | ||
5 | .1** | Opinion of Dykema Gossett PLLC | ||
5 | .2** | Opinion of Ice Miller LLP | ||
5 | .3** | Opinion of Watkins Ludlam Winter & Stennis, P.A. | ||
5 | .4** | Opinion of Robinson Waters & O’Dorisio | ||
10 | .1** | Loan and Security Agreement, dated as of October 7, 2003, by and among The Majestic Star Casino, LLC, certain subsidiaries signatory thereto, the lenders signatories thereto and Wells Fargo Foothill, Inc., as Agent, filed as Exhibit 10.1 to the Company’s Registration Statement No.333-110993, and incorporated herein by reference | ||
10 | .2** | Amendment Number One to Loan and Security Agreement dated as of May 4, 2004, by and among The Majestic Star Casino, LLC, certain subsidiaries signatory thereto, the lenders signatories thereto and Wells Fargo Foothill, Inc., as Agent, filed as Exhibit 10.1 to the Company’s Quarterly Report onForm 10-Q for the period ended March 31, 2004, and incorporated herein by reference | ||
10 | .3** | Amendment Number Two to Loan and Security Agreement dated as of March 1, 2005, by and among The Majestic Star Casino, LLC, certain subsidiaries signatory thereto, the lenders signatories thereto and Wells Fargo Foothill, Inc., as Agent, filed as Exhibit 10.1 to the Company’s Current Report onForm 8-K dated March 22, 2005, and incorporated herein by reference | ||
10 | .4** | Amendment Number Three to Loan and Security Agreement dated as of June 15, 2005, by and among The Majestic Star Casino, LLC, certain subsidiaries signatory thereto, the lenders signatories thereto and Wells Fargo Foothill, Inc., as Agent, filed as Exhibit 10.1 to the Company’s Current Report onForm 8-K dated August 11, 2005, and incorporated herein by reference | ||
10 | .5** | Amendment Number Four to Loan and Security Agreement dated as of December 21, 2005, by and among The Majestic Star Casino, LLC, certain subsidiaries signatory thereto, the lenders signatories thereto and Wells Fargo Foothill, Inc., as Agent, filed as Exhibit 10.8 to the Company’s Current Report onForm 8-K dated December 28, 2005, and incorporated herein by reference | ||
10 | .6** | Amendment Number Five to Loan and Security Agreement dated as of April 13, 2006, by and among The Majestic Star Casino, LLC, certain subsidiaries signatory thereto, the lenders signatories thereto and Wells Fargo Foothill, Inc., as Agent, filed as Exhibit 10.1 to the Company’s Current Report onForm 8-K dated April 17, 2006, and incorporated herein by reference | ||
10 | .7**+ | Amendment to Letter Agreement, dated as of January 1, 2005, between Don H. Barden and The Majestic Star Casino, LLC, filed as Exhibit 10.2 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2004, and incorporated herein by reference | ||
10 | .8**+ | Employment Agreement, dated as of April 6, 2006, by and between Kirk Saylor and The Majestic Star Casino, LLC, filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated May 15, 2006, and incorporated herein by reference | ||
10 | .9**+ | Employment Agreement, dated October 21, 2002, between Jon Bennett and The Majestic Star Casino, LLC, filed as Exhibit 10.4 to the Company’s Registration StatementNo. 333-110993, and incorporated herein by reference | ||
10 | .10**+ | Amendment to Employment Agreement, dated December 20, 2004, between Jon Bennett and The Majestic Star Casino, LLC, filed as Exhibit 10.1 to the Company’s Current Report onForm 8-K dated December 22, 2004, and incorporated herein by reference | ||
10 | .11**+ | Employment Agreement, dated as of December 7, 2004, between Steven J. Lemberg and The Majestic Star Casino, LLC, filed as Exhibit 10.4 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2004, and incorporated herein by reference |
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Exhibit | ||||
No. | Description of Exhibit | |||
10 | .12** | Management Agreement, dated as of October 7, 2003, between The Majestic Star Casino and Barden Development, Inc., filed as Exhibit 10.8 to the Company’s Registration StatementNo. 333-110993, and incorporated herein by reference | ||
10 | .13** | Expense Reimbursement Agreement, dated as of October 7, 2003, between Barden Nevada Gaming, LLC and the Majestic Star Casino, LLC, filed as Exhibit 10.9 to the Company’s Registration StatementNo. 333-110993, and incorporated herein by reference | ||
10 | .14** | Development Agreement, dated March 26, 1996, by and between the Company and the City of Gary, Indiana, filed as Exhibit 10.8 to the Company’s Registration Statement,No. 333-06489, and incorporated herein by reference | ||
10 | .15** | Amendment Number One to Development Agreement, dated October 19, 2005, by and among The Majestic Star Casino, LLC, Trump Indiana, Inc. and the City of Gary, filed as Exhibit 10.9 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2005, and incorporated herein by reference | ||
12 | .1** | Computation of Ratio of Earnings to Fixed Charges for The Majestic Star Casino, LLC | ||
21 | .1** | List of Subsidiaries of The Majestic Star Casino, LLC | ||
23 | .1** | Consent of Dykema Gossett PLLC (included as part of its opinion filed as Exhibit 5.1) | ||
23 | .2** | Consent of Ice Miller LLP (included as part of its opinion filed as Exhibit 5.2) | ||
23 | .3** | Consent of Watkins Ludlam Winter & Stennis, P.A. (included as part of its opinion filed as Exhibit 5.3) | ||
23 | .4** | Consent of Robinson Waters & O’Dorisio (included as part of its opinion filed as Exhibit 5.4) | ||
23 | .5** | Consent of PricewaterhouseCoopers LLP | ||
23 | .6* | Consents of Ernst & Young LLP | ||
24 | .1* | Powers of Attorney (included on the signature page of this Registration Statement) | ||
25 | .1** | Statement of Eligibility of Trustee onForm T-1 with respect to the senior secured notes | ||
25 | .2** | Statement of Eligibility of Trustee onForm T-1 with respect to the senior notes | ||
99 | .1** | Form of Letter of Transmittal for 91/2% Senior Secured Notes due 2010 | ||
99 | .2** | Form of Notice of Guaranteed Delivery of 91/2% Senior Secured Notes due 2010 | ||
99 | .3** | Form of Letter to DTC Participants with respect to 91/2% Senior Secured Notes due 2010 | ||
99 | .4** | Form of Letter to Beneficial Owners with respect to 91/2% Senior Secured Notes due 2010. | ||
99 | .5** | Guidelines for Certification of Taxpayer Identification Number onForm W-9 with respect to 91/2% Senior Secured Notes due 2010 | ||
99 | .6** | Form of Exchange Agent Agreement with respect to 91/2% Senior Secured Notes due 2010 | ||
99 | .7** | Form of Letter of Transmittal for 93/4% Senior Notes due 2011 | ||
99 | .8** | Form of Notice of Guaranteed Delivery of 93/4 Senior Notes due 2011 | ||
99 | .9** | Form of Letter to DTC Participants with respect to 93/4% Senior Notes due 2011 | ||
99 | .10** | Form of Letter to Beneficial Owners with respect to 93/4% Senior Notes due 2011 | ||
99 | .11** | Guidelines for Certification of Taxpayer Identification Number onForm W-9 with respect to 93/4% Senior Notes due 2011 | ||
99 | .12* | Form of Exchange Agent Agreement with respect to 93/4% Senior Notes due 2011 |
* | Filed herewith | |
** | Previously Filed | |
+ | Management contract or compensatory plan or arrangement |
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Item 22. | Exhibits and Financial Statement Schedules |
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By: | /s/ Don H. Barden |
Signature | Title | |||
/s/ Don H. Barden Don H. Barden | Chief Executive Officer (Principal Executive Officer) | |||
/s/ Jon S. Bennett Jon S. Bennett | Vice President and Chief Financial Officer (Principal Financial and Principal Accounting Officer) | |||
/s/ Patrick Cruzan Patrick Cruzan | Director | |||
/s/ Steven J. Lemberg Steven J. Lemberg | Executive Vice President of Strategic Initiatives and Director | |||
/s/ Kirk Saylor Kirk Saylor | Chief Operating Officer and Director | |||
/s/ Michelle S. Sherman Michelle S. Sherman | Director | |||
/s/ Andrew J. Warhola Andrew J. Warhola | Director |
II-10
Table of Contents
By: | /s/ Don H. Barden |
Signature | Title | |||
/s/ Don H. Barden Don H. Barden | Chief Executive Officer and Director (Principal Executive Officer) | |||
/s/ Jon S. Bennett Jon S. Bennett | Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) |
II-11
Table of Contents
By: | /s/ Don H. Barden |
Signature | Title | |||
/s/ Don H. Barden Don H. Barden | Chief Executive Officer and Director (Principal Executive Officer) | |||
/s/ Jon S. Bennett Jon S. Bennett | Vice President and Chief Financial Officer (Principal Financial and Principal Accounting Officer) |
II-12
Table of Contents
By: | /s/ Don H. Barden |
Signature | Title | |||
/s/ Don H. Barden Don H. Barden | Chief Executive Officer (Principal Executive Officer) | |||
/s/ Jon S. Bennett Jon S. Bennett | Vice President and Chief Financial Officer (Principal Financial and Principal Accounting Officer) |
II-13
Table of Contents
By: | /s/ Don H. Barden |
Signature | Title | |||
/s/ Don H. Barden Don H. Barden | Chief Executive Officer (Principal Executive Officer) | |||
/s/ Jon S. Bennett Jon S. Bennett | Vice President and Chief Financial Officer (Principal Financial and Principal Accounting Officer) |
II-14
Table of Contents
By: | /s/ Don H. Barden |
Signature | Title | |||
/s/ Don H. Barden Don H. Barden | Chief Executive Officer (Principal Executive Officer) | |||
/s/ Jon S. Bennett Jon S. Bennett | Vice President and Chief Financial Officer (Principal Financial and Principal Accounting Officer) |
II-15
Table of Contents
By: | /s/ Don H. Barden |
Signature | Title | |||
/s/ Don H. Barden Don H. Barden | Chief Executive Officer (Principal Executive Officer) | |||
/s/ Jon S. Bennett Jon S. Bennett | Vice President and Chief Financial Officer (Principal Financial and Principal Accounting Officer) |
II-16
Table of Contents
By: | /s/ Don H. Barden |
Signature | Title | |||
/s/ Don H. Barden Don H. Barden | Chief Executive Officer (Principal Executive Officer) | |||
/s/ Jon S. Bennett Jon S. Bennett | Vice President and Chief Financial Officer (Principal Financial and Principal Accounting Officer) |
II-17
Table of Contents
Exhibit | ||||
No. | Description of Exhibit | |||
1 | .1** | Purchase Agreement, dated as of December 16, 2005, by and among The Majestic Star Casino, LLC, The Majestic Star Casino Capital Corp., and Jefferies & Company, Inc., filed as Exhibit 10.1 to the Company’s Current Report onForm 8-K dated December 28, 2005, and incorporated herein by reference | ||
1 | .2** | Purchase Agreement, dated as of December 16, 2005, by and among The Majestic Star Casino, LLC, Majestic Star Casino Capital Corp. II, and Jeffries & Company, Inc., filed as Exhibit 10.2 to the Company’s Current Report onForm 8-K dated December 28, 2005, and incorporated herein by reference | ||
2 | .1** | Purchase and Sale Agreement dated as of November 2, 2000, by and among Majestic Investor, LLC, Fitzgeralds Las Vegas, Inc., 101 Main Street Limited Liability Company, Fitzgeralds Mississippi, Inc., Fitzgeralds Gaming Corporation and certain affiliates of the foregoing parties, filed as Exhibit 2.1 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2000, and incorporated herein by reference | ||
2 | .2** | First Amendment to Purchase and Sale Agreement dated as of December 4, 2000 by and among Majestic Investor, LLC, Fitzgeralds Las Vegas, Inc., 101 Main Street Limited Liability Company, Fitzgeralds Mississippi, Inc., Fitzgeralds Gaming Corporation and certain affiliates of the foregoing parties, filed as Exhibit 2.1 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2000, and incorporated herein by reference | ||
2 | .3** | Second Amendment to Purchase and Sale Agreement dated as of November 1, 2001, by and among Majestic Investor Holdings, LLC, Majestic Investor, LLC, Barden Nevada Gaming, LLC, Garden Mississippi Gaming, LLC, Barden Colorado Gaming, LLC, Fitzgeralds Las Vegas, Inc., 101 Main Street Limited Liability Company, Fitzgeralds Mississippi, Inc. and Fitzgeralds Gaming corporation, filed as Exhibit 2.2 to the Company’s Current Report onForm 8-K dated December 28, 2005, and incorporated herein by reference | ||
2 | .4** | Assignment of Interest by Barden Development, Inc. and Majestic Investor Holdings, LLC dated as of December 31, 2003, filed as Exhibit 2.1 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2003, and incorporated herein by reference | ||
2 | .5** | Asset Purchase Agreement, dated July 12, 2004, by and between Legends Gaming, LLC and Barden Colorado Gaming, LLC, filed as Exhibit 2.1 to the Company’s Current Report onForm 8-K dated July 12, 2004, and incorporated herein by reference | ||
2 | .6** | Amendment No. 1, dated February 1, 2005, to Asset Purchase Agreement, dated July 12, 2004, by and between Legends Gaming LLC and Barden Colorado Gaming, LLC, filed as Exhibit 2.2.1 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2004, and incorporated herein by reference | ||
2 | .7** | Stock Purchase Agreement with respect to the stock of Trump Indiana, Inc. (now known as The Majestic Star II, Inc.), dated as of November 3, 2005, by and among The Majestic Star Casino, LLC and Trump Entertainment Resorts Holdings, L.P., filed as Exhibit 2.1 to the Company’s Current Report onForm 8-K dated November 9, 2005, and incorporated herein by reference | ||
3 | .1** | Amended and Restated Articles of Organization of The Majestic Star Casino, LLC, filed as Exhibit 3.1 to the Company’s Registration Statement,No. 333-06489, and incorporated herein by reference | ||
3 | .2** | Third Amended and Restated Operating Agreement of The Majestic Star Casino, LLC dated as of March 29, 1996, filed as Exhibit 3.2 to the Company’s Registration Statement,No. 333-06489, and incorporated herein by reference | ||
3 | .3** | First Amendment of Third Amended and Restated Operating Agreement of The Majestic Star Casino, LLC, dated as of June 18, 1999, filed as Exhibit 3.3 to the Company’s Registration Statement,No. 333-085089, and incorporated herein by reference | ||
3 | .4** | Articles of Incorporation of The Majestic Star Casino Capital Corp., filed as Exhibit 3.4 to the Company’s Registration Statement, No.333-085089, and incorporated herein by reference | ||
3 | .5** | Bylaws of The Majestic Star Casino Capital Corp., filed as Exhibit 3.5 to the Company’s Registration Statement,No. 333-085089, and incorporated herein by reference | ||
3 | .6** | Articles of Incorporation of Majestic Star Casino Capital Corp. II | ||
3 | .7** | Bylaws of Majestic Star Casino Capital Corp. II |
Table of Contents
Exhibit | ||||
No. | Description of Exhibit | |||
3 | .8** | Amendment to Bylaws of Majestic Star Casino Capital Corp. II | ||
3 | .9** | Amended and Restated Articles of Organization of Barden Colorado Gaming, LLC, filed as Exhibit 3.10 to the Company’s Registration Statement,No. 333-110993, and incorporated herein by reference | ||
3 | .10** | Operating Agreement of Barden Colorado Gaming, LLC, filed as Exhibit 3.11 to the Company’s Registration Statement,No. 333-110993, and incorporated herein by reference | ||
3 | .11** | Certificate of Formation of Barden Mississippi Gaming, LLC, filed as Exhibit 3.12 to the Company’s Registration Statement,No. 333-110993, and incorporated herein by reference | ||
3 | .12** | Certificate of Amendment to Certificate of Formation of Barden Mississippi Gaming, LLC, filed as Exhibit 3.13 to the Company’s Registration Statement,No. 333-110993, and incorporated herein by reference | ||
3 | .13** | Certificate of Amendment to Certificate of Formation of Barden Mississippi Gaming, LLC, filed as Exhibit 3.14 to the Company’s Registration Statement,No. 333-110993, and incorporated herein by reference | ||
3 | .14** | Amended and Restated Operating Agreement of Barden Mississippi Gaming, LLC, filed as Exhibit 3.15 to the Company’s Registration Statement, No.333-110993, and incorporated herein by reference | ||
3 | .15** | Second Amended and Restated Certificate of Incorporation of The Majestic Star Casino II, Inc. | ||
3 | .16** | Amended and Restated Bylaws of The Majestic Star Casino II, Inc. | ||
3 | .17** | Certificate of Formation of Buffington Harbor Riverboats, L.L.C. | ||
3 | .18** | Certificate of Formation of Buffington Harbor Parking Associates, LLC | ||
4 | .1** | Indenture, dated as of October 7, 2003, among The Majestic Star Casino, LLC and Majestic Star Casino Capital Corp., as issuers, and the subsidiary guarantors, as subsidiary guarantors and The Bank of New York, as trustee, filed as Exhibit 4.1 to the Company’s Registration Statement,No. 333-110993, and incorporated herein by reference | ||
4 | .2** | Supplemental Indenture, dated as of December 21, 2005, among The Majestic Star Casino, LLC and Majestic Star Casino Capital Corp., as issuers, and the subsidiary guarantors, as subsidiary guarantors and The Bank of New York Trust Company, N.A., as trustee, filed as Exhibit 10.3 to the Company’s Current Report onForm 8-K dated December 28, 2005, and incorporated herein by reference | ||
4 | .3** | Supplemental Indenture, dated as of December 21, 2005, among The Majestic Star Casino, LLC and Majestic Star Casino Capital Corp., as issuers, and the existing and new subsidiary guarantors, as subsidiary guarantors and The Bank of New York Trust Company, N.A., as trustee, filed as Exhibit 10.4 to the Company’s Current Report onForm 8-K dated December 28, 2005, and incorporated herein by reference | ||
4 | .4** | Indenture, dated as of December 21, 2005, among The Majestic Star Casino, LLC and Majestic Star Casino Capital Corp. II, as issuers, and the subsidiary guarantors, as subsidiary guarantors and The Bank of New York Trust Company, N.A., as trustee, filed as Exhibit 10.5 to the Company’s Current Report onForm 8-K dated December 28, 2005, and incorporated herein by reference | ||
4 | .5** | Registration Rights Agreement, dated as of December 21, 2005, among The Majestic Star Casino, LLC, The Majestic Star Casino Capital Corp. and Jefferies & Company, Inc, with respect to the senior secured notes, filed as Exhibit 10.6 to the Company’s Current Report onForm 8-K dated December 28, 2005, and incorporated herein by reference | ||
4 | .6** | Registration Rights Agreement, dated as of December 21, 2005, among The Majestic Star Casino, LLC, Majestic Star Casino Capital Corp. II and Jefferies & Company, Inc, with respect to the senior notes, filed as Exhibit 10.7 to the Company’s Current Report onForm 8-K dated December 28, 2005, and incorporated herein by reference | ||
4 | .7** | Intercreditor Agreement, dated as of October 7, 2003, between The Bank of New York and Wells Fargo Foothill, Inc., filed as Exhibit 4.6 to the Company’s Registration Statement,No. 333-110993, and incorporated herein by reference |
Table of Contents
Exhibit | ||||
No. | Description of Exhibit | |||
4 | .8** | First Amendment to Intercreditor and Lien Subordination Agreement, dated as of December 21, 2005, by and among The Majestic Star Casino, LLC, The Bank of New York Trust Company N.A., Inc. and Wells Fargo Foothill, Inc., filed as Exhibit 4.6 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2005, and incorporated herein by reference | ||
5 | .1** | Opinion of Dykema Gossett PLLC | ||
5 | .2** | Opinion of Ice Miller LLP | ||
5 | .3** | Opinion of Watkins Ludlam Winter & Stennis, P.A. | ||
5 | .4** | Opinion of Robinson Waters & O’Dorisio | ||
10 | .1** | Loan and Security Agreement, dated as of October 7, 2003, by and among The Majestic Star Casino, LLC, certain subsidiaries signatory thereto, the lenders signatories thereto and Wells Fargo Foothill, Inc., as Agent, filed as Exhibit 10.1 to the Company’s Registration Statement No.333-110993, and incorporated herein by reference | ||
10 | .2** | Amendment Number One to Loan and Security Agreement dated as of May 4, 2004, by and among The Majestic Star Casino, LLC, certain subsidiaries signatory thereto, the lenders signatories thereto and Wells Fargo Foothill, Inc., as Agent, filed as Exhibit 10.1 to the Company’s Quarterly Report onForm 10-Q for the period ended March 31, 2004, and incorporated herein by reference | ||
10 | .3** | Amendment Number Two to Loan and Security Agreement dated as of March 1, 2005, by and among The Majestic Star Casino, LLC, certain subsidiaries signatory thereto, the lenders signatories thereto and Wells Fargo Foothill, Inc., as Agent, filed as Exhibit 10.1 to the Company’s Current Report onForm 8-K dated March 22, 2005, and incorporated herein by reference | ||
10 | .4** | Amendment Number Three to Loan and Security Agreement dated as of June 15, 2005, by and among The Majestic Star Casino, LLC, certain subsidiaries signatory thereto, the lenders signatories thereto and Wells Fargo Foothill, Inc., as Agent, filed as Exhibit 10.1 to the Company’s Current Report onForm 8-K dated August 11, 2005, and incorporated herein by reference | ||
10 | .5** | Amendment Number Four to Loan and Security Agreement dated as of December 21, 2005, by and among The Majestic Star Casino, LLC, certain subsidiaries signatory thereto, the lenders signatories thereto and Wells Fargo Foothill, Inc., as Agent, filed as Exhibit 10.8 to the Company’s Current Report onForm 8-K dated December 28, 2005, and incorporated herein by reference | ||
10 | .6** | Amendment Number Five to Loan and Security Agreement dated as of April 13, 2006, by and among The Majestic Star Casino, LLC, certain subsidiaries signatory thereto, the lenders signatories thereto and Wells Fargo Foothill, Inc., as Agent, filed as Exhibit 10.1 to the Company’s Current Report onForm 8-K dated April 17, 2006, and incorporated herein by reference | ||
10 | .7**+ | Amendment to Letter Agreement, dated as of January 1, 2005, between Don H. Barden and The Majestic Star Casino, LLC, filed as Exhibit 10.2 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2004, and incorporated herein by reference | ||
10 | .8**+ | Employment Agreement, dated as of April 6, 2006, by and between Kirk Saylor and The Majestic Star Casino, LLC, filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated May 15, 2006, and incorporated herein by reference | ||
10 | .9**+ | Employment Agreement, dated October 21, 2002, between Jon Bennett and The Majestic Star Casino, LLC, filed as Exhibit 10.4 to the Company’s Registration StatementNo. 333-110993, and incorporated herein by reference | ||
10 | .10**+ | Amendment to Employment Agreement, dated December 20, 2004, between Jon Bennett and The Majestic Star Casino, LLC, filed as Exhibit 10.1 to the Company’s Current Report onForm 8-K dated December 22, 2004, and incorporated herein by reference | ||
10 | .11**+ | Employment Agreement, dated as of December 7, 2004, between Steven J. Lemberg and The Majestic Star Casino, LLC, filed as Exhibit 10.4 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2004, and incorporated herein by reference | ||
10 | .12** | Management Agreement, dated as of October 7, 2003, between The Majestic Star Casino and Barden Development, Inc., filed as Exhibit 10.8 to the Company’s Registration StatementNo. 333-110993, and incorporated herein by reference | ||
10 | .13** | Expense Reimbursement Agreement, dated as of October 7, 2003, between Barden Nevada Gaming, LLC and the Majestic Star Casino, LLC, filed as Exhibit 10.9 to the Company’s Registration StatementNo. 333-110993, and incorporated herein by reference |
Table of Contents
Exhibit | ||||
No. | Description of Exhibit | |||
10 | .14** | Development Agreement, dated March 26, 1996, by and between the Company and the City of Gary, Indiana, filed as Exhibit 10.8 to the Company’s Registration Statement,No. 333-06489, and incorporated herein by reference | ||
10 | .15** | Amendment Number One to Development Agreement, dated October 19, 2005, by and among The Majestic Star Casino, LLC, Trump Indiana, Inc. and the City of Gary, filed as Exhibit 10.9 to the Company’s Annual Report onForm 10-K for the year ended December 31, 2005, and incorporated herein by reference | ||
12 | .1** | Computation of Ratio of Earnings to Fixed Charges for The Majestic Star Casino, LLC | ||
21 | .1** | List of Subsidiaries of The Majestic Star Casino, LLC | ||
23 | .1** | Consent of Dykema Gossett PLLC (included as part of its opinion filed as Exhibit 5.1) | ||
23 | .2** | Consent of Ice Miller LLP (included as part of its opinion filed as Exhibit 5.2) | ||
23 | .3** | Consent of Watkins Ludlam Winter & Stennis, P.A. (included as part of its opinion filed as Exhibit 5.3) | ||
23 | .4** | Consent of Robinson Waters & O’Dorisio (included as part of its opinion filed as Exhibit 5.4) | ||
23 | .5** | Consent of PricewaterhouseCoopers LLP | ||
23 | .6* | Consents of Ernst & Young LLP | ||
24 | .1* | Powers of Attorney (included on the signature page of this Registration Statement) | ||
25 | .1** | Statement of Eligibility of Trustee onForm T-1 with respect to the senior secured notes | ||
25 | .2** | Statement of Eligibility of Trustee onForm T-1 with respect to the senior notes | ||
99 | .1** | Form of Letter of Transmittal for 91/2% Senior Secured Notes due 2010 | ||
99 | .2** | Form of Notice of Guaranteed Delivery of 91/2% Senior Secured Notes due 2010 | ||
99 | .3** | Form of Letter to DTC Participants with respect to 91/2% Senior Secured Notes due 2010 | ||
99 | .4** | Form of Letter to Beneficial Owners with respect to 91/2% Senior Secured Notes due 2010 | ||
99 | .5** | Guidelines for Certification of Taxpayer Identification Number onForm W-9 with respect to 91/2% Senior Secured Notes due 2010 | ||
99 | .6** | Form of Exchange Agent Agreement with respect to 91/2% Senior Secured Notes due 2010 | ||
99 | .7** | Form of Letter of Transmittal for 93/4% Senior Notes due 2011 | ||
99 | .8** | Form of Notice of Guaranteed Delivery of 93/4 Senior Notes due 2011 | ||
99 | .9** | Form of Letter to DTC Participants with respect to 93/4% Senior Notes due 2011 | ||
99 | .10** | Form of Letter to Beneficial Owners with respect to 93/4% Senior Notes due 2011 | ||
99 | .11** | Guidelines for Certification of Taxpayer Identification Number onForm W-9 with respect to 93/4% Senior Notes due 2011 | ||
99 | .12** | Form of Exchange Agent Agreement with respect to 93/4% Senior Notes due 2011 |
* | Filed herewith | |
** | Previously Filed | |
+ | Management contract or compensatory plan or arrangement |